UC-NRLF 


90 


DfiE 


U.  S.  Grain  Growers,  I 


A  Farmer-Owned,  Non-Stock, 
Non-Profit  Association  to 
Handle  and  Sell  Grain  at 
Cost  for  its  Farmer  Members 


nc 


Providing  Facilities  for  tfie  Grain  Growers  of  the 

United  States  To  Enter  Upon  a  Program 

of  Conducting  Their  Own  Business 

in  a  Business-Like  Way 


*  *  * 


DISTRICT  SALES  '  OFFICES 
EXPORT  CORPORATION 
TERMINAL  WAREHOUSE  CO. 
FINANCE  CORPORATION 
SERVICE  DEPARTMENTS 
OTHER  SUBSIDIARIES 


Department     of    Information 
U.  S.  Gnjin  Growers,  Inc. 


Table  or  Contents 


Page 

Farmers  Marketing  Committee  of  Seventeen  .......................     3 

Appointment  of  committee  ...................................     4 

x 

Public    Representation  .......................................     4 

Fanners'    Orjrani/at  ions   Represented  ..........................     4 

Development  of  Marketing  Plan  ..............................     5 

Legal     Committee  .........................................     6 

National    Ratification    Conference  .............................     6 

Extracts  from  Addresses,  National  Ratification  Conference  ..........     7 

What  Is  the  U.  S.  Grain  Growers,  Inc.  ?  ...........................     9 

How  Grain  Will  Be  Handled.  '  ..............................   10 

Contracts  With  Farmers'  Elevators  ...........................   11 

Advantages  of  the  Plan  ......................................   11 

Farmer  Owned  Subsidiary  Corporations  .......................   12 

Why  Every  Grain  Grower  Should  Join  ........................   14 

What  About  the   Consumer  ?  .................................   15 

Who  Are  the  Officers  and  Directors  ?  .............................   16 

Executive  and  Departmental  Committees  ..........................   20 

Questions  and  Answers  on  the  Plan  ..............................  21 

The  Member's  Contract  ......................................  21 

Grower  's   Privileges    ...............................  .  ......  .  .  22 

The  Elevator  Contract  .......................................  23 

Definition  of  Pools.  .  .  .......................................   24 

Administration   of   Pools  .....................................  24 

Questions  on  Pooling  ........................................   25 

Administration  of  the  Company  ..............................  26 

Election  of  Officers  .................  .........................   27 

Objects  of  the  Plan  .................................  .  .......  28 

Summary  of  the  Articles  of  Incorporation  ........................   30 

By  Laws    ......................................................  31 

Grain    Grower's    Contract  .  .  ......................................   38 

Cooperative  Elevator  's   Contract  ..................................    47 

Index  to  By  Laws  and  Contracts.  .  52 


Farmers  Marketing  Committee  of  Seventeen 

A  Short  Story  About  tke   Greatest   Cooperative 
Effort   in  the   History   of  Agriculture. 


ON  July  23rd  and  24th,  1920,  for  the  first  time  in  the  history  of  or- 
ganized agriculture,  a  truly  representative  group   of   grain   grow- 
ing farmers  from  all  different  farmers'  organizations,  and  from  all 
parts  of  the  United  States  met  in  a  national  get-together  marketing  con- 
ference in  Chicago.     Time  and  again  some  farmer  leader  with  a  vision 
had  made  an  attempt  to  unify  the  efforts  of  different  cooperative  farm- 
ers' organizations.     And  time  and  again,  the  aims  of  such  a  cooperative 
movement   had  been  defeated.     Selfish   organizational  purposes   or   per- 
sonal ambition  on  the  part  of  leadership  have  made  difficult  the  prog- 
ress of  national  cooperation. 

It  is  fortunate  for  agricultural  cooperation  in  America  that  the  five 
hundred  men  in  that  conference  were  broad-gauged  men.  They  were 
men  who  could  see  beyond  the  local  cooperative  elevator,  the  district  mar- 
ket terminal  or  even  state  and  national  associations  of  cooperative  ele- 
vators. Many  of  them  were  men  who  had  pioneered  in  the  establishment 
of  cooperative  elevators  and  bore  the  brunt  of  the  fights  made  by  boards 
of  trade,  commission  companies  and  line  elevators,  until  the  local  coop- 
erative elevator  has  become  an  established  fact,  operating  on  a  strictly 
business  basis,  contributing  to  the  prosperity  of  the  local  farming  com- 
munity and  furnishing  a  fertile  field  for  the  development  of  agricultural 
cooperation.  There  were  also  men  in  that  conference  who  had  had  a 
part  in  the  attempts  made  by  farmers'  cooperative  associations  to  enter 
tin*  central  grain  markets  and  faced  the  closed  door  to  all  farmers'  or- 
ganizations. 

But  the  conviction  remained  that  the  farmers  of  America  could  mar 
ket  their  grain  to  their  advantage — honestly,  uprightly,  and  in  a  busi- 
nesslike way — as  well  as  manufacturers  of  farm  machinery,  harness  and 
clothing  merchandise  their  products.  The  men  in  this  national  confer- 
ence had  that  conviction.  They  believed  in  the  good  sound  business  abil- 
ity of  the  rank  and  file  of  the  farmers  of  the  United  States.  They 
trusted  in  the  conservative  judgment  and  cautiousness  that  is  inherent 
in  the  man  who  tills  the  soil  and  must  correlate  weather  conditions,  crop 


49148; 


U.  S.  Grain  Growers,  Inc. 


pests,  soil  conditions  and  price  fluctuations  in  the  conduct  of  his  annual 
business.  Unity  had  been  the  weak  point  in  their  cooperation.  As  be- 
tween the  cooperative  efforts  of  the  different  cooperative  organizations 
they  realized  that  the  greatest  weakness  had  been  that  they  had  not 
cooperated  with  each  other. 

So  it  was  that  out  of  this  national  marketing  conference  there  came 
the  Farmers'  Marketing  Committee  of  Seventeen.  These  seventeen . men 
represented  state  and  national  organizations  of  farmers  who  were  inter- 
ested in  the  marketing  of  grain.  Some  members  of  the  committee  se- 
lected, either  wholly  or  in  part,  represented  the  interests  of  the  public — 
the  consumers  of  grain.  The  provision  for  such  public  representation  on 
their  committee,  which  was  entrusted  with  the  responsibility  of  work- 
ing out  the  problem  of  how  the  farmer  could  best  market  his  grain,  re- 
veals the  broad,  moral  character  of  the  farmers  of  the  United  States. 

The  American  farmer  was  honest  enough  to  recognize  a  principle,  too 
often  disregarded  in  commercial  enterprises,  namely,  that  the  agencies 
which  distribute  either  the  ,basic  necessities  of  life  or  those  necessary  to 
content  and  happiness  in  our  modern  age,  need  to  protect  themselves 
against  human  selfishness  to  avoid  injuring  others.  The  public  repre- 
sentation on  the  Committee  of  Seventeen  is  a  most  important  section  of 
the  brief,  in  the  case  of  the  U.  S.  Grain  Growers,  Inc.,  as  it  now  comes 
before  the  bar  of  public  opinion  of  America,  and  also  of  European  coun- 
tries who  will  likewise  be  its  customers.  The  instance  is  without  prece- 
dent. The  United  States  Steel  Corporation,  the  Standard  Oil  Co.,  cotton 
and  woolen  manufacturers,  and  like  industrial  enterpreneurs  or  so-called 
captains  of  industry,  do  not  invite  public  representatives  to  sit  on  their 
committees  when  they  are  considering  the  incorporation  of  a  new  com- 
pany. 

The  Committee  of  Seventeen  represented  the  following  organizations: 
Nebraska  Farmers'  Union,  Iowa  Farmers'  Grain  Dealers'  Association, 
Illinois  Agricultural  Association,  Equity  Cooperative  Exchange,  Michigan 
Farm  Bureau,  Missouri  Farmers'  Grain  Dealers'  Association,  National 
Farmers'  Equity  Union,  American  Agricultural  Editors  Association  (pub- 
lic), Missouri  Farmers'  Clubs,  Oklahoma  Farmers'  Union,  State  Agricul- 
tural Colleges  (public),  U.  S.  Department  of  Agriculture  (public), 
Farmers'  National  Grain  Dealers'  Association,  Kansas  State  Farm 
Bureau,  Ohio  State  Grange,  American  Farm  Bureau  Federation,  South 
Dakota  State  Bureau  of  Markets  (public). 

Nearly  seven  months  were  spent  in  an  exhaustive  study  of  cooperative 
grain  marketing  by  the  Committee  of  Seventeen.  "With  money  furnished 
by  different  farmers'  organizations,,  sub-committees  visited  every  sue- 


Farmers  Marketing  Committee  of  Seventeen 


cessful  cooperative  agency  in  the  United  States  and  Canada.  A  study 
of  reports  from  foreign  cooperative  enterprises  was  included.  Four  of 
the  best  statisticians  and  investigators  from  the  Federal  Trade  Commis- 
sion and  the  U.  S.  Department  of  Agriculture  were  secured  to  compile 
exhaustive  data  on  the  grain  trade,  both  domestic  and  export,  and  to 
tabulate  and  chart  the  information  so  that  the  facts  could  be  readily  un- 
derstood. The  best  informed  men  on  the  grain  trade,  those  opposed  to 
cooperation  as  well  as  those  who  favored  it,  met  and  talked  with  the 
committee.  Those  opposed  to  cooperation  tried  to  tell  the  committee  that 
the  farmers  could  never  hope  to  get  nearer  the  central  markets  than  the 
local  cooperative  elevator — but  the  Committee  of  Seventeen  thanked  them 
for  their  suggestions  and  kept  on  sawing  wood. 

They  found  that  seventy-two  per  cent  of  our  wheat  is  marketed 
within  ninety  days  after  harvest.  And  they  incorporated  as  one  of  the 
first  basic  principles  of  their  marketing  plan  the  fact  that  there  must  be 
a  more  orderly  movement  of  grain  to  market  so  as  to  avoid  market  gluts 
that  play  into  the  hands  of  the  speculator.  They  found  that  some  of  the 
greatest  profits  are  made  in  mixing,  re-grading  and  conditioning  grains, 
and  they  incorporated  the  fact  that  the  farmer  must  do  these  jobs  h'm- 
self  if  he  is  to  realize  more  nearly  the  market  value  of  his  crops. 

They  found  that  false  market  reports  of  foreign  crop  conditions  give 
the  farmer  low  prices  and  do  not  lower  the  price  to  the  consumer.  And 
the  principle  of  an  unbiased  crop  reporting  service  to  be  gathered  and 
disseminated  by  the  farmers  themselves  was  added  as  a  part  of  the  mar- 
keting plan.  They  found  that  over  fifty  times  as  much  '.'grain"  is  sold 
in  the  pits  of  the  Chicago  Board  of  Trade  every  year  as  is  actually  mar- 
keted in  the  Chicago  market  and  that  these  transactions  in  imaginary 
grain  effect  the  cash  price  of  real  grain  to  the  detriment  of  producer  and 
consumer.  They  included  in  their  plan  the  fact  that  by  selling  direct 
from  farmer  to  miller  or  exporter,  both  producer  and  consumer  would  be 
benefited.  They  found  that  a  Canadian  cooperative  export  company  had 
effected  savings  of  from  three  to  five  cents  a  bushel  over  what  privately 
owned  export  companies  had  exacted,  and  they  included  an  export  com- 
pany in  their  plan. 

They  found  numberless  instances  of  wastage  in  transportation  and 
equipment — Nebraska  wheat  shipped  to  Chicago,  thence  to  Minnesota  to 
be  milled  and  then  back  to  Nebraska  as  flour;  wheat  received  in  Chicago 
from  Kansas  City  and  reconsigned  to  St.  Louis;  only  twenty-three  per 
cent  of  terminal  elevator  capacity  ever  used  and  grain  forced  to  bear 
the  burden  of  such  short  sighted  investment  and  needless  duplication 
of  overhead  expenses,  over  and  over  again. 


U.  S.  Grain  Growers,  Inc. 


Gradually,  the  marketing  plan  of  the  Committee  of  Seventeen  shaped 
itself  into  a  national  farmers'  cooperative  marketing  company — a  non- 
stock, non-profit  corporation  which  "differs  chiefly  from  existing  market- 
ing methods  in  that  it  recognizes  capital  only  as  a  servant,  remunerating 
it  for  its  service  value  only,  and  returns  to  the  producer  the  proceeds 
of  his  toil  in  proportion  to  his  patronage." 

The  by-laws  and  contracts  were  then  left  in  the  hands  of  a  commit- 
tee of  lawyers  who  were  retained  to  draw  up  these  documents  in  accord- 
ance with  the  plan  which  the  committee  had  completed.  The  best  legal 
talent  was  none  too  good  and  the  committee  retained  the  most  eminent 
legal  authorities  on  agricultural  cooperatives  in  America.  Clifford 
Thome,  Chicago,  member  of  the  Committee  of  Seventeen,  a  general 
legal  counsel  of  note,  and  the  outstanding  authority  on  transportation 
in  the  United  States,  as  well  as  the  most  successful  counsel  on  farmers' 
cooperatives  in  the  Midwest,  was  chairman  of  the  committee  of  attorneys. 
Aaron  Sapiro,  San  Francisco,  attorney  for  the  California  cooperative 
organizations,  wheat  growers  of  the  northwest  and  southern  agricultural 
cooperative  associations,  who  has  attained  a  national  prominence,  like- 
wise served  on  the  committee.  J.  H.  Broady,  Lincoln,  Nebr.,  lawyer  of 
prominence  in  that  state,  attorney  for  various  cooperative  organizations 
and  a  member  of  the  law  faculty  of  the  University  of  Nebraska;  George 
E.  Farrand,  Los  Angeles,  Calif.,  general  counsel  for  the  California  Fruit 
Growers  Exchange,  and  other  farmers'  marketing  companies;  Fred  W. 
Lehman,  St.  Louis,  Mo.,  former  Solicitor  General  of  the  United  States, 
and  Judge  John  G.  Park,  Kansas  City,  Mo.,  a  former  circuit  court  judge, 
were  equally  expert  and  capable  attorneys  who  assisted  in  this  work. 

On  February  17,  1921,  the  plan  of  the  Committee  of  Seventeen  was 
announced.  Then  followed  the  National  Ratification  Conference  in  Chi- 
cago, April  6-8,  where  official  delegates  from  every  farmers'  organization 
In  the  twenty-three  grain  states  were  called  to  consider  and  adopt  or 
reject  the  plan.  There  was  only  one  point  in  the  plan  upon  which  there 
was  a  difference  of  opinion;  namely,  pooling  of  wheat.  The  committee 
plan  offered  the  grower  the  choice  of  selecting  the  pooling  method,  direct 
sales  method  or  consignment.  Some  delegates  wished  to  make  it  compul- 
sory for  every  wheat  grower  to  pool  one-third  of  his  wheat.  Such  an 
amendment  was  proposed  and  for  more  than  a  day  and  a  half  it  was  the 
one  subject  before  the  conference.  It  was  determined  that,  in  view  of 
the  fact  that  a  national  pool  of  any  food  commodity  had  never  been 
tried,  it  would  be  unwise  to  accept  the  proposed  amendment  to  the  com- 
mittee's plan  in  that  it  might  jeopardize  or  prevent  the  successful  opera- 


Extracts  from  Addresses 


tion  of  the  national  cooperative  plan.     The  original  report  of  the  Com- 
mittee of  Seventeen  was  then  unanimously  adopted. 

The  delegates  to  the  national  conference  then  elected  the  board  of 
twenty-one  directors  who  were  to  proceed  with  the  organization  of  the  new 
company.  On  April  16th,  the  U.  S.  Grain  Growers,  Inc.,  was  incorporated 
as  a  non-stock,  non-profit  corporation.  It  is  now  open  for  business.  It  is 
an  organization  of  farmers,  by  farmers,  for  farmers.  Its  success  depends 
upon  the  cooperation  of  all  grain  growers.  It  is  purely  a  business  prop- 
osition— on  a  cooperative  basis — designed  to  secure  more  satisfactory  and 
stable  marketing  conditions  and  better  prices  through  the  practice  of 
efficient  and  economic  marketing  methods,  without  disadvantage  to  the 
consumer. 


Extracts   from   Addresses 

National    Ratification   Conference 
Chicago,   April  6-8,    1921 


HENRY  C.  WALLACE 
Secretary  of  Agriculture 

''There  are  some  good  people  who  seem  to  think  that  the  farmer 
should  not  concern  himself  with  matters  of  marketing.  *  *  *  There 
is  no  more  reason  why  the  farmer  should  be  expected  to  confine  his  efforts 
solely  to  the  production  of  his  crops  than  why  the  manufacturer  should 
be  expected  to  confine  his  attention  solely  to  the  mechanical  process  of 
manufacturing  his  goods.  *  *  * 

' '  As  to  the  plan  which  yon  have  come  here  to  consider,  *    there 

are  several  features  which  appeal  to  me  strongly.  First:  You  seem  to 
have  avoided  the  weaknesses  which  have  broken  down  many  previous 
organizations.  *  *  *  Second:  You  do  not  attempt  to  wipe  out  our 
great  marketing  machinery  which  has  been  built  up  through  a  long 
period  of  time.  *  *  Third:  You  are  neither  attempting  to  create 
a  monopoly  nor  to  fix  prices. 

"This  nation  cannot  hope  to  maintain  its  agriculture  on  a  sound  eco- 
nomic basis  unless  our  farmers  give  attention  to  the  business  end  of  their 
business.     As  large  producers  they  have  been  the  best  in  the  world.     As 
*     salesmen  they  liave  been  very,  very  poor.     *     *     *     We  have  come  to  a 


8  U.  S;  Grain  Growers,  Inc. 

time  in  our  national  life  when  our  agriculture  must  be  put  on  a  sound 
economic  basis.  This  is  imperative  if  production  is  to  be  maintained 
and  our  people  are  to  be  fed  at  reasonable  costs." 

J.  R.  HOWARD 

President,  American  Farm  Bureau  Federation 

"This  is  the  first  national  step  in  sending  to  the  rear  the  impedimenta 
of  distribution  adjusted  for  private  benefit.  Cooperation  brings  the  pro- 
ducer individually  face  to  face  with  the  consumer.  It  profits  both.  More 
than  profit,  it  makes  contacts  which  result  in  the  better  understanding 
each  of  the  other.  It  increases  vision.  It  removes  the  farmer  from  the 
narrow  path  of  the  individual  worker  and  gives  him  the  realization  that 
he  is  not  an  underling,  but  a  world  character.  It  does  not  seek  selfish 
economic  advantages;  it  does,  in  a  very  broad  sense,  stimulate  character 
and  promote  citizenship.  I  am  for  it.  The  combining  of  time  and  effort, 
of  capital  and  of  commodity,  cooperatively,  is  not  alone  our  privilege — 
it  is  our  right." 

C.  H.  GUSTAFSON 

Chairman,   Farmers  Marketing   Committee   of   Seventeen 

"We  believe  that,  while  recognizing  and  protecting  the  rights  of  the 
consuming  public,  this  cooperative  marketing  plan  insures  the  farmer 
an  equitable  and  just  return  on  his  grain  crop  by  effecting  savings, 
avoiding  speculation,  preventing  needless  duplication  of  effort,  and 
eventually  stabilizing  the  market  for  grain  crops.  The  plan  provides 
purely  and  simply  for  the  farmer  to  enter  upon  a  program  of  conducting 
his  own  business  of  marketing.  * 

"This  plan  will  in  no  way  interfere  with  the  work  of  existing  farm 
organizations.  It  recognizes  the  excellent  foundational  work  that  various 
farm  organizations  have  done  and  which  has  prepared  the  way  for  such 
a  national  cooperative  effort  as  the  grain  marketing  plan  which  your 
joint  'committee  of  seventeen'  proposes.  * 

"It  is  a  business  proposition — on  a  cooperative ,  basis — and  is  based 
on  the  fact  that  the  farmer  is  as  able  to  commercialize  his  products  as 
are  the  producers  of  any  other  products.  *  *  *  The  work  of  the  com- 
mittee is  now  done  and  the  report  is  in  your  hands  which  will  make  a 
straight  road  to  market." 


What   Is   the    U.   S.   Grain   Growers? 


\Vhat   is  tke   U.  S.    Grain   Growers 
and  what  will   it   do? 

The  U.  S.  Grain  Growers,  Inc.,  is  a  non-stock,  non-profit  association. 
It  will  handle  and  sell  grain  at  cost  for  its  farmer  members.  No  one 
but  a  farmer  can  be  a  member,  sell  grain  through  it  or  hold  office  in  it. 
There  is  no  way  for  any  one  to  make  any  money  out  of  it  except  the 
members  themselves  who  grow  the  grain. 

The  U.  S.  Grain  Growers,  Inc.,  is  not  designed  to  upset  existing  com- 
mercial institutions.  It  is  not  an  attempt  to  either  create  a  monopoly  or 
fix  prices.  It  is  imperative,  however,  that,  if  production  is  to  be  main- 
tained and  the  people  of  the  United  States  are  to  be  fed  at  reasonable 
costs,  agriculture  must  be  placed  on  a  sound  business  basis.  Recogniz- 
ing those  facts,  the  U.  S.  Grain  Growers,  Inc.,  provides  the  facilities  for 
the  grain  growers  of  our  country  to  enter  upon  a  program  of  conducting 
their  own  business,  in  a  business-like  way.  With  that  end  in  view,  the 
U.  S.  Grain  Growers,  Inc.,  will: 

Stabilize  prices  on  a  profitable  level  by  steady  marketing  as  demand 
warrants  and  by  contracts  direct  with  mills  and  other  consumers. 

Eliminate  short  selling  and  manipulated  markets  by  keeping  grain  in 
the  farmers  control  until  sold  to  a  legitimate  buyer. 

Merchandise  grain  products  in  a  business-like  way  comparable  to  that 
employed  in  other  industries. 

Export  or  pool  for  export  grain  not  needed  for  domestic  consumption 
so  that  speculators  can  not  use  a  bounteous  harvest  to  beat  down  the  price 
at  harvest  time  to  a  ruinous  figure. 

Furnish  credit  through  the  subsidiary  finance  corporation  to  grain 
growers  who  do  not  want  to  sell  their  crops  at  harvest  time. 

Learn  the  true  condition  of  foreign  supply  and  demand  and  avoid 
manipulation  that  has  been  made  possible  by  false  market  reports. 

Clean,  mix,  re-grade  and  condition  the  farmers  grain  in  farmer-owned 
conditioning  plants. 

Eliminate  unnecessary  and  duplicated  freight  and  handling  charges  by 
shipping  grain  direct  from  the  country  station  to  the  miller  or  exporter. 

Pro-rate  the  savings  made  by  efficient  and  economic  marketing  back  to 
the  farmer  in  proportion  to  the  amounts  and  grades  of  grain  which  he 
sold  through  the  company. 


]0  U.  S.  Grain  Growers,  Inc. 

HOW   GRAIN   WILL   BE   HANDLED. 

Two  kinds  of  contracts  are  provided  in  the  marketing  plan  of  the  U.  S. 
Grain  Growers,  Inc.  One  contract  is  between  the  individual  grain  grower 
and  his  local  cooperative  elevator  or  local  grain  growers'  association 
(where  there  is  no  local  cooperative  elevator).  The  other  contract  is 
made  between  the  local  cooperative  elevator  or  grain  growers'  association 
and  the  U.  S.  Grain  Growers,  Inc. 

The  grain  grower  executes  his  contract,  by  which  he  agrees  to  market 
all  of  his  surplus  grain  through  the  marketing  organization  for  a  period 
of  five  years,  at  the  time  that  he  becomes  a  member.  The  membership  fee 
is  $10.  This  fee  is  paid  but  once. 

Grain  that  is  required  and  used  by  the  grower  or  sold  by  him  locally 
for  local  use  for  seed  or  feed  or  sold  otherwise  with  the  written  approval 
of  the  U.  S.  Grain  Growers,  Inc.,  is  exempt  from  the  contract.  The 
provision  for  written  approval  will  allow  of  quantities  of  grain  to  be 
milled  locally  to  meet  the  requirements  of  the  local  district. 

The  individual  grower  may  elect  to  sell  his  grain  under  any  one  of  four 
options  provided  for  in  the  growers'  contract: 

1.  It  may  be  sold  to  the  farmers'  local  cooperative  company  or 
grain  growers  association   just   as   at   present.     The   grower   will 
receive  the  current  market  price  at  time  of  sale  just  as  he  does  at 
present.     His  advantage  will  be  that  savings  made  by  the  export 
company,   conditioning  plants,  warehousing   company,  transporta- 
tion department,  sales  department,  etc.,  will  increase  the  average 
price  paid  to  the  grower. 

2.  It  may  be  shipped  on  consignment. 

3.  It  may  be  pooled  locally.    In  that  case  the  time  and  place  of 
pooling  is  in  the  hands  of  a  local  pooling  committee  elected  by  the 
farmers  who   place  their  grain  in  the   pool.     Each   grower  will 
receive  the  average  price  for  the  pooled  grain  of  each  grade.    Two 
or  more  local  communities  may  put  their  grain  into  a  joint  pool  in 
which  case  the  control  passes  to  the  pooling  committee  of  the  U.  S. 
Grain  Growers,  Inc.     Pools  may  be  township  wide,  county  wide, 
state  wide  or  national.     The  development  of  the  pooling  feature 
under  the  contracts  depends  upon  whether  the  growers  find  this 
method  of  marketing  to  be  most  satisfactory. 

4.  In  the  case  of  wheat,  one-third  or  the  exportable  surplus  of 
each  member's  crop  may  be  put  into  an  export  pool  if  he  so  elects. 
The  other  two-thirds  may  be  handled  under  any  one  of  the  first 
three  options  as  the  grower  may  decide. 


What  Is   the   V.  S.   Grain   Growers? 11 

CONTRACTS  WITH  FARMERS  ELEVATORS. 

Contracts  with  elevators  will  only  be  made  with  farmers  cooperative 
elevators.  The  requirements  which  an  elevator  company  must  meet  in 
order  to  be  considered  truly  cooperative,  are  that  it  must  be  organized 
as  a  cooperative  company  under  the  laws  of  the  state  in  which  it  is  in- 
corporated. It  must  distribute  its  profits  to  its  farmer  patrons  in  propor- 
tion to  their  patronage. 

If  there  is  no  state  cooperative  law  in  the  state,  the  elevator  must  meet 
these  requirements: 

1.  Each  stockholder  can  have  one  vote  only. 

2.  Each  stockholder  can  own  only  a  limited  amount  of  stock. 

3.  Dividends  on  stock  must  be  limited  to  a  reasonable  rate. 

4.  The  earnings,  above  cost  and  surplus  funds,  must  be  dis- 
tributed as  patronage  dividends. 

5.  No    proxy    voting    may    be    allowed    unless    required    by 
statute. 

6.  Ownership  of  stock  must  be  limited  to  grain  growers. 

7.  Stock  must  be  available  for  sale  to  any  grain  grower  in  the 

*  community  who  wishes  to  become  a  member. 

Farmers  stock  company  elevators  will  be  urged  to  change  to  a  co- 
operative basis.  If  impracticable  or  impossible  for  such  an  elevator  to 
immediately  do  so,  the  directors  or  stockholders  may  form  a  local  growers' 
association.  Such  a  local  grain  growers'  association  will  be  formed  which 
will  consist  only  of  growers  who  are  members  of  the  U.  S.  Grain  Growers, 
Inc.  The  elevator  contract  will  then  run  from  the  local  grain  growers' 
association  to  the  U.  S.  Grain  Growers,  Inc.  The  local  grain  growers' 
association  will  then  cross  contract  with  the  farmers  elevator  to  handle 
and  load  its  grain  for  it  at  a  fair  charge.  Local  grain  growers'  associations 
will  likewise  be  formed  in  localities  where  there  is  no  farmer-owned 
elevator. 

Where  the  stockholders  or  directors  of  a  farmers'  stock  company 
elevator  do  not  organize  a  local  grain  growers'  organization,  the  U.  S. 
Grain  Growers,  Inc.,  will  make  no  attempt  to  organize  that  community 
prior  to  Januray  1,  1924. 

ADVANTAGES  OF  THE  PLAN. 

One   of   the   strongest   points   about   this   plan    of   cooperative   grain 

*  marketing  is  the  ease  with  which  it  can  be  put  into  operation.     To  start 
with,  the  grain  may  be  handled  locally  with  no  change  from  the  present 


12  U.  S.  Grain  Growers,  Inc. 


method — the  grower  simply  selling  his  grain  to  his  local  farmers'  elevator 
company.  The  only  change  anywhere  along  the  line  will  be  that  the  grain 
will  be  sold  at  the  terminals  by  the  selling  department  of  the  U.  S.  Grain 
Growers,  Inc.,  instead  of  by  a  private  commission  house,  as  at  present. 

In  an  advisory  way,  the  U.  S.  Grain  Growers,  through  its  statistical 
department,  will  have  full  information  regarding  world  conditions  affect- 
ing supply  and  demand.  It  can  advise  local  elevator  companies  as  to  the 
best  time  and  place  to  ship.  It  can  by  lease  or  otherwise  acquire  terminal 
warehouse  space  for  the  use  of  elevator  companies  which  wish  to  store 
grain  for  a  later  market.  Through  its  finance  corporation,  it  will  be  able 
to  loan  money  on  stored  grain  so  that  financial  pressure  will  not  force  it 
onto  the  market  at  an  unfavorable  time. 

Again,  by  the  gradual  development  of  pooling,  if  this  method  proves  by 
actual  trial  to  be  an  advantageous  way  of  handling  grain.  The  first  step 
in  pooling  is  the  local  pool  which  is  easy  to  start  and  manage  and  is 
wholly  in  the  control  of  the  local  growers.  This  can  be  followed  later  by 
pooling  on  a  larger  scale,  by  combining  local  pools  into  joint  pools  and 
transferring  the  control  over  the  time  and  place  of  marketing  to  the 
pooling  committee  of  the  U.  S.  Grain  Growers,  Inc. 

One  great  advantage  of  the  plan  is  that  the  grain  is  handled  at  cost 
from  the  time  it  leaves  the  farmers'  hands.  Local  elevators,  in  order  to 
be  a  basic  4>art  of  the  plan,  must  be  truly  cooperative.  This  means  that 
they  must  do  business  at  cost  and  that  all  profits  after  paying  necessary 
expenses,  including  reasonable  dividends  on  capital  invested  in  the  busi- 
ness, are*  paid  back  to  the  growers  in  proportion  to  the  amounts  and 
grades  of  grain  delivered. 

Another  great  advantage  of  the  plan  is  that  the  grain  marketing  or- 
ganization will  be  owned  and  controlled  by  farmers  from  start  to  finish. 
No  one  but  an  actual  producer  of  grain  can  be  a  member  of  the  U.  S. 
Grain  Growers,  Inc.,  or  have  a  vote  in  the  organization.  No  one  but  an 
actual  producer  of  grain  can  hold  office  in  the  U.  S.  Grain  Growers,  Inc. 

FARMER-OWNED  SUBSIDIARY  CORPORATIONS. 

A  number  of  subsidiary  companies  have  been  or  will  be  formed  for 
handling  various  lines  of  business  connected  with  grain  marketing.  The 
first  to  be  organized  will  be  finance,  export  and  terminal  warehousing 
corporations.  Most  of  the  capital  of  these  subsidiaries  will  be  secured  by 
selling  stock  to  farmers.  This  stock  will  receive  a  fixed  rate  of  dividend 
representing  a  fair  rate  of  interest  on  the  money  invested.  The  common 
stock  which  will  be  held  in  the  treasury  of  the  U.  S.  Grain  Growers,  Inc., 
and  voted  by  the  directors,  will  represent  the  voting  power.  This  means 


What  Is  the  U.  S.  Grain  Growers? 13 

that  the  Board  of  Directors  of  the  U.  S.  Grain  Growers,  Inc.,  will  control 
the  subsidiary  companies. 

Chief  in  importance  among  the  subsidiary  companies  will  be  the  finance 
corporation.  This  finance  corporation  will  not  do  a  general  banking 
business.  Its  chief  function  will  be  to  accept  warehouse  receipts,  covering 
stored  or  pooled  grain,  and  issue  its  own  notes  or  grain  bonds  against 
these  receipts.  These  grain  securities  of  the  finance  corporation  will  be  a 
gilt  edge,  uniform  security  that  can  be  placed  with  city  or  country  banks 
or  with  private  investors.  Any  member  cooperative  elevator  company  or 
pooling  committee  which  has  grain  in  storage,  can  turn  its  warehouse 
receipts  over  to  the  finance  corporation  and  receive  cash  for  the  full  loan 
value  of  the  grain  in  return.  In  this  way  funds  for  the  orderly  marketing 
of  grain  will  be  provided. 

The  finance  corporation  will  be  a  benefit  to  the  local  banks.  In  com- 
munities that  are  short  of  funds,  the  finance  corporation  will  help  the 
local  banks  carry  the  load  of  financing  the  grain  movement.  Banks,  which 
have  surplus  funds  for  outside  investment,  can  secure  the  best  possible 
form  of  investment  in  the  grain  paper  of  the  finance  corporation. 

Another  important  subsidiary  is  the  export  corporation.  This  corpora- 
tion will  have  the  task  of  finding  foreign  buyers  for  the  exportable  surplus. 
At  present  a  number  of  foreign  governments  operate  at  great  advantage 
on  the  grain  markets  of  -this  country  because  they  have  concentrated  all 
their  buying  in  the  hands  of  one  buyer.  The  export  corporation  will  be 
able  to  deal  with  these  foreign  buyers  on  equal  terms. 

Not  only  will  the  export  corporation  sell  grain  to  existing  foreign 
buyers,  but  its  agents  will  .create  new  foreign  buyers  for  grain.  Our 
policy  in  the  past  has  been  to  sell  grain  to  foreign  buyers  who  came  over 
and  asked  for  it.  In  the  future  we  will  set  up  agencies  of  the  farmers 
export  corporation  in  every  corner  of  the  world,  going  after  new  business 
just  as  aggressively  as  the  agents  of  the  International  Harvester  Com- 
pany or  the  U.  S.  Steel  Corporation  do.  The  possibilities  of  increasing 
the  foreign  outlet  for  American  grain  in  this  way  are  very  great. 

Another  subsidiary  will  be  the  warehouse  corporation.  This  corpora- 
tion will  provide  storage  space  at  terminals  by  lease,  purchase  or  by 
building  new  terminal  elevators.  At  present  there  is  a  great  excess  of 
terminal  warehouse  space,  and  it  is  probable  that  a  sufficient  amount  can 
be  leased  at  reasonable  terms.  It  is  not  likely  that  the  warehouse  cor- 
poration will  need  to  build  any  terminals  for  some  time  to  come,  unless 
it  may  be  at  new  points  where  grain  can  be  stored  to  advantage. 

The  warehouse  corporation  will  also  have  charge  of  cleaning,  mixing, 
and  conditioning  grain.  A  good  deal  of  this  work  can  be  done  most 


14  V.  S.  Grain  Growers,  Inc. 

cheaply  in  conditioning  houses  along  the  lines  of  grain  movement,  while 
in  transit  to  the  manufacturing  or  export  point,  without  paying  unneces- 
sary freight  tolls  to  points  that  are  out  of  the  way. 

WHY  EVERY  GRAIN  GROWER  SHOULD  JOIN. 

The  U.  S.  Grain  Growers,  Inc.,  is  the  greatest  undertaking  to  which  the 
farmers  of  America  ever  set  their  hands.  The  men  who  have  been 
entrusted  with  the  direction  of  the  movement  for  the  first  year  are  filled 
with  the  spirit  of  service  to  agriculture.  They  have  seen  the  vision  of  the 
dawning  of  a  new  era  for  the  farmers  of  America. 

But  they  cannot  do  the  job  alone.  They  must  have  the  earnest  sup- 
port of  every  grain  grower.  This  task  is  too  great  for  any  group  of 
twenty-one  men,  however  capable,  to  accomplish.  If  it  is  to  succeed — 
and  the  future  of  agriculture  depends  on  its  success — it  must  have  behind 
it  the  united  efforts  of  the  farmers  of  America. 

The  day  has  passed  when  the  farmers*  task  was  confined  within  the 
boundaries  of  his  farm.  His  prosperity  depends  more  on  what  goes  on 
outside  his  farm  than  upon  his  own  efforts  in  the  corn  and  wheat  fields. 
No  amount  of  skillful  planning  and  hard  work  can  make  up  for  a  market 
that  goes  wrong.  The  time  has  come  when  farmers  must  not  rest  content 
when  their  crop  is  produced.  They  must  take  it  to  the  markets  of  the 
world. 

The  responsibility  for  the  success  of  this  great  undertaking  rests  on 
the  shoulders  of  every  grower  of  grain.  No  man  can  afford  to  say  that  he 
will  let  his  neighbor  do  it.  Every  grower  who  neglects  to  join  the  U.  S. 
Grain  Growers  is  voting  against  this  plan  of  cooperative  marketing. 

These  are  critical  days  for  the  man  on  the  farm.  We  have  sold  one 
year's  crop  at  a  loss.  Our  prices  have  fallen  far  more  than  the  prices  of 
the  things  we  buy.  There  is  only  one  bright  spot  in  the  sky — the  develop- 
ment of  cooperative  marketing. 

The  leaders  in  this  movement  are  only  human  beings.  They  will  prob 
ably  make  mistakes  now  and  then.  But  no  grain  grower  can  afford  to  say 
that,  because  mistakes  are  made  or  because  he  does  not  like  some  in- 
dividual connected  with  the  organization,  he  will  stay  outside.  Mistakes 
were  made  in  the  War  of  the  Revolution,  in  the  first  Continental  Con- 
gress, in  every  great  movement  that  has  lifted  men  from  barbarism  into 
civilization.  But,  by  mistakes  we  learn.  A  great  movement  is  far  greater 
than  its  mistakes,  far  greater  than  its  leaders.  With  the  united  support 
of  the  grain  growers  of  America  this  grain  marketing  movement  cannot 
fail.  The  day  will  come  when  farming  will  be  the  best  business  in  the 
world,  as  it  is  now  the  most  satisfactory  life  in  the  world. 


What  Is   the   V.   S.   Grain   Growers? 15 

We  ask  you  to  study  this  plan.  Study  the  contracts.  Pledge  your 
loyalty  and  support  to  the  U.  S.  Grain  Growers,  Inc.  Talk  it  over  with 
your  neighbors.  When  our  organizer  asks  you  to  join,  do  so  with  a  word 
of  encouragement.  The  slogan  is  "a  million  members  this  year." 

With  your  help,  success  is  certain. 

WHAT  ABOUT  THE  CONSUMER? 

Now  just  a  word  about  the  folks  who  eat  the  food  that  we  produce. 
They  may  look  upon  this  grain  marketing  plan  with  suspicion,  and  who 
can  blame  them?  They  have  been  exploited  and  gouged  and  overcharged 
so  long  that  they  have  come  to  expect  it. 

It  is  the  hope  of  the  Board  of  Directors  of  the  U.  S.  Grain  Growers, 
Inc.,  to  familiarize  the  consumer  with  fundamental  facts  about  food  pro- 
duction and  distribution.  We  want  him  to  appreciate  the  fact  that  a 
prosperous  nation  is  dependent  upon  a  prosperous  agriculture  and  that  a 
prosperous  agriculture  will  reduce  the  living  costs  of  the  nation.  Two- 
thirds  of  the  people  of  the  United  States  live  in  towns  and  cities.  They 
live  and  eat  only  by  virtue  of  the  toil  of  the  man  on  the  farm.  Unless 
the  farmer  receives  a  fair  return  for  that  toil  he  cannot  adopt  improved 
methods  of  production,  he  cannot  maintain  and  increase  soil  fertility,  he 
cannot  prepare  for  the  day  when  the  farmers  of  America  will  have  two 
hundred  million  people  to  feed. 

We  do  not  believe  that  the  average  city  man  wants  to  be  unfair  to  the 
farmer,  or  that  he  wants  him  to  produce  food  for  less  than  cost.  He  just 
doesn't  think  anything  about  it.  We  want  him  to  think.  We  want  him 
to  understand — before  he  condemns  the  U.  S.  Grain  Growers,  Inc.,  before 
he  declares  that  we  are  unfair,  or  before  he  calls  it  a  trust — just  how 
necessary  it  is  that  the  farmers  have  better  marketing  methods  and  better 
prices. 

We  want  him  to  realize,  too,  how  small  a  part  of  the  dollar  that  he 
pays  for  food  ever  gets  to  the  farmer — two  cents  out  of  the  eight  or  ten 
he  pays  for  a  loaf  of  bread  or  three  cents  out  of  the  14  he  pays  for  a 
quart  of  milk.  We  want  him  to  understand  how  efficient  marketing  and 
distribution  of  farm  crops  can  give  the  farmer  more  for  his  labor  and,  in 
turn,  cost  the  city  man  less  for  his  food. 

We  want  him  to  understand,  too,  that  we  have  no  thought  of  fixing 
arbitrary  prices  or  limiting  production.  It  isn't  in  the  farmer's  nature 
to  cut  down  his  production.  He  loves  to  raise  a  bumper  crop.  He  takes 
pride  in  setting  a  full  table  for  the  people  of  the  world.  All  he  asks  in 
return  is  that  he  be  paid  a  reasonable  wage  for  his  work — a  request  so  fair 
that  no  one  can  justly  find  fault  with  him  for  making  it. 


16  U.  S.  Grain  Growers,  Inc. 

We  want  the  consumer  to  think  in  terms  of  cooperation.  We  want  him 
to  know  what  cooperation  means  to  the  farmer.  We  hope  the  time  will 
come  when  consumers,  too,  will  cooperate — when  our  cooperative  organ- 
izations can  meet  theirs  in  the  market  places  of  the  world.  When  that 
time  comes  no  one  need  ever  pay  excessive  prices  for  food,  and  no  farmer 
will  need  to  dump  his  crops  on  the  market  at  a  fraction  of  the  cost  of 
production. 

These   Twenty   One   Farmers   Are 
Officers   and   Directors 

Who  are  the  men  who  have  charge  of  this  farmers'  national  grain 
marketing  company?  Are  they  worthy  of  the  confidence  of  their  neigh- 
bor farmers  in  their  own  states  and  neighboring  states?  Each  member 
of  the  board  of  directors  of  the  U.  S.  Grain  Growers,  Inc.,  stands  on  his 
record  as  a  farmer,  as  a  business  man  through  experience  in  farmers' 
cooperative  enterprises  and  as  a  good  neighbor  and  citizen.  These  brief 
facts  about  the  directors  are  presented  as  their  credentials  to  the  grain 
growers  and  consumers  of  grain  products.  Information  in  more  detail 
and  bank  references  will  be  furnished  upon  request. 

C.  H.  Gustafson,  President,  Lincoln,  Nebr.  Mr.  (Justafson  has  been  <\ 
leader  in  the  farmers'  cooperative  movement  for  years.  He  was 
president  of  the  Nebraska  Farmers'  Union  from  1914  to  1921.  As 
president  of  the  Farmers'  Union  Live  Stock  Commission  Co.  of 
Omaha,  he  built  up  a  cooperative  business  of  $40,000,000  annually, 
which  pro-rated  fifty  per  cent  of  its  commissions  back  to  its  patrons. 
He  has  organized  and  headed  other  farmers'  cooperative  companies 
that  have  materially  benefited  the  farmer.  Mr.  Gustafson  was  chair- 
man of  the  Committee  of  Seventeen  and  is  director  of  cooperative 
marketing  for  the  American  Farm  Bureau  Federation.  He  lived  on 
the  same  section  of  land  at  Mead,  Nebr.,  for  forty-seven  years,  where 
he  still  operates  a  farm. 

/.  M.  Anderson,  1st  Vice  President,  Chairman  of  Sales  Department  Com- 
mittee, St.  Paul,  Minn.  Since  its  organization  in  1911,  Mr.  Ander- 
son has  been  president  of  the  Equity  Cooperative  Exchange  of  St. 
Paul,  a  farmers'  grain  and  live  stock  marketing  organization  which 
operates  a  line  of  elevators  and  owns  a  big  terminal  elevator  at  St. 
Paul.  It  did  a  grain  business  of  nearly  $20,000,000  last  year.  Mr. 
Anderson  actively  managed  his  farm  until  his  other  duties  with  the 


Officers   and  Directors  17 


farmers'  cooperatives  required  all  of  his  time.     Member  of  the  Com- 
mittee of  Seventeen. 

Geo.  C.  Jewett,  2nd  Vice  President,  Spokane,  Wash.  For  several  years 
Mr.  Jewett  was  secretary  of  the  Federal  Farm  Loan  Bank  at  Seattle, 
and  is  now  general  manager  of  the  Northwest  Wheat  Growers  Asso- 
ciated, which  comprises  the  states  of  Washington,  Oregon  and  Idaho. 
This  organization  of  farmers  has  nearly  25,000,000  bushels  of  wheat 
under  contract. 

C.  II.  Hyde,  3rd  Vice  President,  Chairman  of  Pooling  Department  Com- 
mittee, Aha,  Okla.  Mr.  Hyde  is  prominent  in  farmers'  organizations 
and  cooperative  marketing  work  in  Oklahoma  and  the  Southwest. 
He  has  lived  on  the  same  farm  for  the  last  twenty-seven  years  and 
has  sown  at  least  five  hundred  acres  of  wheat  every  year  for  the 
past  fifteen  years.  Member  of  the  Committee  of  Seventeen. 

Frank  M.  Myers,  Secretary.,  Chairman  of  the  Information  Department 
Committee,  Fort  Dodge,  lozva.  For  several  years  Mr.  Myers  has 
been  secretary  of  the  Farmers'  Grain  Dealers  Association  of  Iowa, 
and  the  Farmers'  National  Grain  Dealers  Association,  a  national 
organization  of  more  than  three  thousand  farmers'  elevator  compa- 
nies. Prior  to  that  time  he  was  manager  of  a  cooperative  elevator 
at  Beamen,  Iowa,  and  farmed  near  there.  His  experience  in  cooper- 
ative elevator  work  has  given  him  an  understanding  of  grain  mar- 
keting that  .will  be  exceedingly  valuable  to  him  in  his  work  with  the 
U.  S.  Grain  Growers,  Inc.  Member. of  the  Committee  of  Seventeen. 

W '.  G.  Eckhardt,  Treasurer,  Chairman  of  the  Organization  Department 
'Committee,  DeKalb,  III.  Mr.  Eckhardt  received  his  first  lessons  in 
cooperation  in  DeKalb  County,  111.,  where  he  organized  a  cooperative 
seed  company  and  flour  mill.  Prior  to  that  time  he  farmed  as  high 
as  twelve  hundred  acres  of  land  and  is  now  operating  two  farms  in 
Illinois.  In  1918  he  was  seed  corn  administrator  for  the  Illinois 
State  Council  of  Defense.  For  the  past  year  he  has  been  Director 
of  Grain  Marketing  of  the  Illinois  Agricultural  Association.  Mem- 
ber of  the  Committee  of  Seventeen. 

H.  W.  Robinson,  Chairman  of  Transportation  Department  Committee, 
Cleveland,  Ohio.  For  eight  years,  Mr.  Robinson  was  chairman  of 
a  national  marketing  association  and  is  well  acquainted  with  leading 
traffic  men.  He  is  now  president  and  manager  of  the  Union  Coop- 


18  V-  S.  Grain  Growers,  Inc. 

erative  Elevator  at  Cleveland,  Ohio,  a  300,000  bushel  capacity  farm- 
ers' plant. 

P.  E.  Donnell,  Chairman  of  the  Legal  Department  Committee,  Waco,  Mo. 
Presiding  county  judge  in  his  home  county.  President  of  the  Mis- 
souri Farmers'  Grain  Dealers'  Association.  Member  of  the  Com- 
mittee of  Seventeen.  He  is  an  active  farmer. 

R.  C.  Obrechtj  Chairman  of  the  Statistical  Department  Committee,  R.  F. 
D.  28,  Topeka,  Kans.     Leader   of   Farmers'   Union   cooperatives   in 
Kansas.     Formerly  an  agricultural  college  professor.     He  is  an  ac- 
tive farmer. 

W.  F.  Schilling,  Chairman  of  Finance  Department  Committee,  North- 
field,  Minn.  Mr.  Schilling  is  president  of  the  Twin  Cities  Milk  Pro- 
ducers' Company.  The  success  of  this  $500,000  company  is  largely 
due  to  his  efforts  and  his  ability  in  handling  financial  matters.  He 
is  an  active  farmer. 

U.  L.  Burdick,  Fargo,  N.  D.  President  of  the  North  Dakota  Farm  Bu- 
reau0  Federation.  He  is  an  attorney  and  has  served  one  term  as 
lieutenant-governor  in  his  state.  He  operates  a  farm  in  North  Da- 
kota. 

F.  A.  Mudge,  Peru,  III.  First  vice  president  Farmers'.  Grain  Dealers' 
Association  of  Illinois.  V'ifce  president  Farmers'  Elevator  Coopera- 
tive Supply  Company  of  Illinois.  He  is  president  of  one  farmers' 
elevator  and  a  member  of  the  board  of  directors  of  another  farmers' 
elevator.  President  of  a  farm  loan  association  and  a  member  of 
the  executive  committee  of  LaSalle  County  (Illinois)  Farm  Bureau. 
He  is  an  active  farmer. 

James  Nicol,  South  Haven,  Mich.  President  of  the  Michigan  State 
Farm  Bureau.  He  is  an  active  farmer. 

Adam  Middleton,  Eagle  Grove,  Iowa.  President  of  his  local  cooperative 
elevator  company.  Director  in  the  Farmers'  Grain  Dealers'  Associa- 
tion of  Iowa.  Member  of  the  executive  committee  of  the  Iowa  Farm 
Bureau  Federation.  President  of  the  American  Cooperative  Publish- 
ing Co. — a  farmer-owned  publishing  plant.  He  was  vice-chairman 
of  the  Committee  of  Seventeen.  He  is  an  active  farmer. 


Officers  and  Directors  19 

Robert  N.  Clark,  Strong  hurst,  III.  Member  of  the  executive  committee 
of  the  Illinois  Agricultural  Association.  He  is  an  active  farmer. 

H.  W .  Coit,  Renner,  Tex.  Director  of  the  Texas  Farm  Bureau  Federa- 
tion. He  is  an  active  farmer. 

H.  W.  Avery,  Wake  field,  Kans.  A  member  of  the  Kansas  State  Board 
of  Agriculture.  He  is  an  active  farmer. 

James  K.  Mason,  Milton,  Ind.  A  leader  in  the  Indiana  Federation  of 
Farmers'  Associations  and  Farmers'  Grain  Dealers'  Association  of 
Indiana.  President  of  the  Fayette  County  (Indiana)  Federation  of 
Farmers.  Member  of  Indiana  Grain  Committee.  He  is  an  active 
farmer. 

/.  D.  Pancake,  Loveland,  Colo.  An  officer  of  the  Farmers'  Grain  Deal- 
ers' Association  of  Colorado.  He  is  an  active  farmer. 

Victor  H.  Smith,  Wasco,  Ore.  President  of  the  Oregon  Wheat  Grow- 
ers' Association.  He  is  an  active  farmer. 

John  T.  Belk,  Henry,  S.  Dak.  President  of  the  Farmers'  Grain  Dealers' 
Association  of  South  Dakota.  He  is  an  active  farmer  and  president 
of  his  local  cooperative  elevator. 


20  U.  S.  Grain  Growers,  Inc. 

Officers 

C.  H.  Gustafsoii President Lincoln,  Neb. 

J.  M.  Anderson .First  Vice-President St.  Paul,  Minn 

Geo.  C.  Jewett Second  Vice-President Spokane,  Wash. 

C.  H.  Hyde Third  Vice-President Alva,  Okla. 

Wm.  G.  Eckhardt Treasurer DeKalb,  111. 

Frank  M.  Myers Secretary Ft.  Dodge,  Iowa 

Executive    Committee 

C.  H.  Gustafson,  Chairman President 

J.  M.  Anderson Sales  Department 

P.  E.  Donnell Legal  Department 

Wm.  G.  Eckhardt ? Organization  Department 

C.   H.    Hyde Pooling  Department 

Frank  M.  Myers Information  Department 

R.  C.  Obrecht '. Statistical  Department 

H.  W.   Robinson Transportation  Department 

W.  F.  Schilling Finance  Department 


Departmental   Committees 

(The  president  is  ex-officio  member  of  each  departmental  committee.) 

{J.  M.  Anderson,  Chr. 
G.  C.  Jewett 
H.  W.  Robinson 
f  W.  F.  Schilling,  Chr. 

Finance   Dept -.  <  G.  C.  Jewett 

L  P.  E.  Donnell 
fWm.  G.  Eckhardt,  Chr. 
W.  F.  Schilling 

Organization  Dept •<  J.  K.  Mason 

H.  W.  Avery 
I  C.  H.  Hyde 
f  H.  W.  Robinson,  Chr. 

Transportation  Dept «4  H.  W.  Coit 

L  J.  D.  Pancake 

f  P.  E.  Donnell,  Chr. 

Legal    Dept J  U.  L.  Burdick 

L  J.  R.  Mason 

f  C.  H.  Hyde,  Chr. 

Pooling   Dept J  R.  N.  Clarke 

IT.  H.  Smith 

f  R.  C.  Obrecht,  Chr. 

Statistical   Dept ^  J.  D.  Pancake 

|^  James  Nicol 

C  Frank  M.  Myers,  Chr. 

Information  Dept J  J.  T.  Belk 

I  F.  A.  Mudge 


Questions   and   Answers   on   the   Plan  21 

Questions   ana   Answers   on  the   Plan 

A  Discussion  of  Contracts,  Methods  and  Policies 


The 

Member's 
Contract 


Q.     Why  is  it  necessary  to  pay  $10  to  join  the 
(J.  S.  Grain  Growers,  Inc.? 

A.  It  is  necessary  to  have  adequate  funds  to 
pay  organization  expenses,  to  get  together  a  sales 
force  to  handle  the  grain,  to  establish  branch  sales 
offices,  to  establish  a  news  and  information  service  to  gather  statistics 
about  the  world  supply  of  grain  and  the  world  demand  for  it,  to  establish 
subsidiary  corporations,  and  to  pay  operating  expenses  until  a  sufficient 
volume  of  grain  is  being  handled  to  carry  these  expenses.  The  fairest  way 
to  provide  this  initial  capital  is  to  charge  each  grower  a  membership  fee 
of  $10.  This  ,is  not  an  annual  fee,  but  is  only  to  be  collected  once — at 
the  time  that  the  grower  joins  the  organization. 

Q.     Why  is  it  necessary  for  the  grower  to  sign  a  contract? 

A.  The  U.  S.  Grain  Growers,  Inc.,  expects  to  stabilize  the  business 
of  selling  grain  by  making  contracts  with  millers  and  other  users  of  grain, 
including  foreign  buyers.  In  order  to  do  this  on  a  business  basis  it  must 
in  turn  have  agreements  with  the  grower  in  order  that  it  may  be  sure  of 
getting  the  grain. 

Q.     How  long  does  the  grower's  contract  run? 

A.     For  five  years  and  continued  unless  cancelled  by  him. 

Q.  Is  a  grower  safe  in  signing  away  his  grain  for  that  length  of 
time? 

A.  Yes.  No  one  can  make  a  profit  out  of  it.  The  entire  organization 
is  controlled  by  men  elected  by  himself  and  other  farmers  under  the  same 
contracts.  The  farmer's  grain  is  certainly  as  safe  in  the  hands  of  the 
farmer's  own  company  as  it  is  in  the  hands  of  private-owned  agencies  as 
at  present. 

Q.     WThat  if  the  grain  is  mortgaged? 

A.  The  grower  must  give  the  elevator  company  a  statement  of  any 
mortgages  or  liens  against  the  grain  when  he  delivers  it. 

Q.  What  assurance  has  the  grower  that  he  will  receive  the  money  for 
his  grain? 

A.  All  officials  and  employees  handling  grain  or  money  for  the  U.  S. 
Grain  Growers,  Inc.,  are  adequately  bonded. 

Q.  If  a  grower  does  not  pool  his  grain,  when  must  he  decide  whether 
it  is  to  be  sold  to  the  elevator  company  or  shipped  on  consignment  ? 


22  U.  S.  Grain  Growers,  Inc. 

A.       When  he  delivers  it  to  the  elevator  company. 

Q.    Why  does  the  grower  make  a  contract  with  the  local  elevator  com- 
pany instead  of  with  the  national  association? 

A.  We  have  about  4,000  farmers'  elevators  which  have  been  very 
successful  in  handling  the  grain  marketing  problem  as  far  as  their  influ 
ence  extends.  It  was  felt  that  the  elevator  companies  should  be  made  a 
basic  part  of  the  new  grain  marketing  plan,  that  they  should  be  preserved 
and  strengthened  and  that  control  of  all  grain  should  be  kept  in  the 
hands  of  the  local  people. 


Growers* 
Privileges 


Q.     Can  the  grain  grower  deliver  his  grain  when 
he  pleases? 

A.  As  already  explained,  the  grain  growers  in 
each  locality  will  decide  whether  to  sell  directly  to 
the  elevator  as  today  or  to  pool.  If  the  grain  is 
being  handled  under  the  first  method,  the  grower  can  bring  in  the  grain 
when  he  pleases,  providing  the  elevator  has  space  to  receive  it  or  cars  in 
which  to  load  it.  The  farmer  uses  his  own  judgment  as  to  the  best  time 
and  manner  to  sell.  Furthermore,  the  farmer  will  have  the  advantage 
of  his  own  crop  reporting  service  which  will  enable  him  to  more  accu- 
rately determine  the  best  time  to  sell. 

Q.  When  a  grower,  who  is  a  member  of  the  U.  S.  Grain  Growers, 
Inc.,  delivers  his  grain  to  the  local  elevator  and  wants  to  consign  his 
grain  direct  to  the  sales  offices  of  the  U.  S.  Grain  Growers,  Inc.,  who  pays 
him  for  that  grain? 

A.  Consigned  grain  will  be  handled  by  the  selling  agency  of  the 
U.  S.  Grain  Growers,  Inc.,  just  as  it  is  now  being  handled,  with  the  ex- 
ception that  the  farmer  will  receive  the  full  sale  price  less  handling 
charges.  The  farmer  will  make  arrangements  for  loading  with  his  local 
elevator.  He  will  receive  payment  for  his  shipment  direct  from  the  dis- 
trict sales  office. 

Q.    What  happens  if  a  grower  moves  to  another  community  ? 

A.  He  can  have  his  contract  transferred  to  the  elevator  in  that 
community. 

Q.    What  if  the  grower  quits  farming? 

A.  His  contract  becomes  inoperative.  It  will  become  binding  again, 
however,  if  he  again  becomes  a  grain  grower  before  the  end  of  the  contract 
period  of  five  years.  All  grain  he  has  on  hand  when  he  quits  farming  must 
be  delivered  according  to  the  terms  of  the  contract. 

.     Can  the  contract  be  assigned  to  some  other  grower? 


Questions  and  Answers  on  the  Plan  23 

A.  Yes,  by  one  tenant  to  a  succeeding  tenant,  or  by  a  man  who  sells 
his  farm  to  the  man  who  buys  it.  In  either  case  the  old  contract  must 
be  delivered  to  the  elevator  company  and  a  new  one  issued. 

Q.  Can  the  grain  grower  sell  his  grain  to  a  seed  company  or  to  a 
local  mill? 

A.  Yes,  by  agreement  with  his  local  elevator  company  or  grain  grow- 
ers' association. 

Q.  Does  the  grower's  contract  leave  the  grower  free  to  decide  for 
himself  what  kind  of  grain  he  will  raise,  and  the  number  of  acres  of  each 
kind? 

A.  Yes.  The  contract  reads  "nothing  in  this  contract  shall  deprive 
the  grower  of  control  in  any  degree  over  his  own  acreage,  and  produc- 
tion." 


The 

Elevator 
Contract 


Q.  What  does  the  elevator  company  do  with  this 
grain? 

A.  It  ships  it  to  any  desired  terminal  or  other 
designated  point  for  sale  by  the  U.  S.  Grain  Grow- 
ers, Inc. 

Q.  Does  the  local  elevator  finance  the  movement  of  consigned  grain 
in  part  or  in  full  or  does  the  finance  corporation  finance  the  movement 
of  the  grain? 

A.  The  financing  of  consigned  grain  will  be  handled  just  as  it  is  at 
the  present  time.  It  is  possible,  however,  that  if  any  considerable  num- 
ber of  farmers  sell  their  grain  in  this  way  that  arrangements  can  be 
made  so  that  the  farmer  can  secure  a  reasonable  advance  on  his  grain 
by  presenting  his  bill  of  lading  at  the  local  bank. 

Q.  Does  the  U.  S.  Grain  Growers,  Inc.,  have  any  control  over  the  time 
and  place  of  shipment? 

A.     Only  in  an  advisory  way.    It  acts  as  a  selling  company. 

Q.  Can  the  elevator  company  sell  this  grain  through  some  other  com- 
mission company? 

A.  No.  It  is  under  contract  to  sell  all  contracted  grain  only  through 
the  U.  S.  Grain  Growers,  Inc. 

Q.  Can  the  elevator  company  buy  grain  from  growers  who  are  not 
members  of  the  U.  S.  Grain  Growers,  Inc.? 

A.  Yes,  but  it  cannot  sell  such  grain  through  the  U.  S.  Grain  Growers, 
Inc.  The  U.  S.  Grain  Growers,  Inc.,  can  handle  members'  grain  only. 

Q.  If  the  elevator  buys  grain  outright  from  members,  what  price  will 
be  paid? 


24  U.  S.  Grain  Growers,  Inc. 


A.  The  going  market  price,  just  as  at  present.  Any  profits  accu- 
mulated by  the  elevator  company  or  the  local  grain  growers'  association 
will  be  prorated  back  to  the  grower  as  a  patronage  dividend. 

Q.  "What  does  the  cooperative  elevator  company  or  grain  growers' 
association  do  with'  its  grain  ? 

A.  It  is  under  contract  to  sell  it  through  the  U.  S.  Grain  Growers, 
Inc.  In  case  the  local  company  buys  the  grain  outright  from  members, 
ships  on  consignment,  or  handles  the  grain  in  a  local  pool,  the  U.  S. 
Grain  Growers,  Inc.,  will  act  as  a  commission  house  only. 


Definition 

of 
Pools 


Q.     What  is  meant  by  a  local  pool? 


,  A.     The  local  pool  is  a  means  of  centralizing  the 

selling  responsibility  and  giving  each  grower  the 
average  price  received  for  grain  of  his  kind  and 
grade.  Suppose  a  group  of  growers  around  a  given 
point  decide  to  handle  their  wheat  in  a  pool.  When  a  grower  delivers  his 
wheat  he  will  be  given  a  receipt  for  so  many  bushels  of  a  given  grade. 
He  will  also  receive  an  advance  payment  covering  a  part  of  the  value  of 
the  grain.  A  separate  account  will  be  kept  of  each  grade.  The  wheat  will 
be  sold  at  various  times  throughout  the  period  of  the  pool,  according  to 
the  judgment  of  the  local  pooling  committee.  When  all  the  wheat  of  one 
grade  has  been  sold  the  balance-  over  and  above  the  handling  charges  will 
be  paid  back  to  the  growers.  The  same  thing  will  be  true  of  other  grades. 
Instead  of  waiting  until  all  the  wheat  of  any  one  grower  is  sold  before 
paying  the  grower  the  balance  of  his  money,  it  may  be  paid  in  several 
installments  as  the  wheat  is  disposed  of. 
Q.  What  is  meant  by  the  one-third  pool  ? 

A.  This  applies  to  wheat  only.  The  grower  may  agree  to  put  one- 
third,  or  the  exportable  surplus,  of  his  wheat  in  a  national  pool.  The 
balance  may  be  sold,  consigned  or  put  into  a  local  pool.  The  disposition 
of  the  one-third,  or  the  exportable  surplus,  will  be  in  the  hands  of  the 
U.  S.  JGrain  Growers,  Inc.,  and  part  of  it  may  be  sold  through  the  export 
company. 


Q.     When  i&  the  pooled  grain  delivered  ? 

A.  When  the  local  pooling  committee  decides. 
It  will  be  guided  by  the  wishes  of  the  grower  so  far 
as  possible,  however.  The  local  pooling  committee 
may  pay  growers'  carrying  charges  on  an  agreed 
scale,  for  holding  grain  from  harvest  until  it  is  delivered. 


Administration 

of 
Pools 


Questions   and   Answers   on  the  Plan  25 

Q.  Where  will  the  local  pooling  committee  get  money  to  pay  advance 
on  grain? 

A.  It  will  borrow  some  of  it  from  the  local  banks.  The  balance  will 
be  obtained  from  the  finance  corporation  with  warehouse  receipts  as 
security. 

Q.  What  will  be  the  relation  of  the  pooling  committee  to  the  elevator 
company  ? 

A.  It  will  probably  contract  with  the  elevator  company  to  handle  the 
grain  for  it  on  an  agreed  charge.  It  will  control  the  grain,  however,  and 
handle  it  in  any  other  way  it  may  find  advantageous. 

Q.    "What  is  a  joint  pool? 

A.  Two  or  more  local  pooling  committees  may  decide  to  put  their 
grain  of  any  kind  or  grade  into  a  joint  pool,  in  which  case  the  control  of 
time,  quantity  and  place  of  sale  shall  be  in  the  hands  of  the  pooling 
committee  of  the  U.  S.  Grain  Growers,  Inc. 


Questions 


on 


Pooling 


Q.     What  is  a  local  pooling  committee? 
A.     It  is  a  committee  of  three  elected  by  growers 
who  have  grain  in  the  pool.    This  committee,  accord- 
ing to  the  contract,  shall  exercise  complete  control 
over  the  handling,  shipping  and  selling  of-all  pooled 
grain,  determining  the  time,  quantity  and  destination  of  sales,  and  effect- 
ing all  necessary  contracts  and  other  arrangements  for  storage,  etc.     The 
person  selected  by  this  committee  to  handle  the  grain  shall  be  under  bond. 

Q.  Do  all  growers  of  grain  in  the  community  have  to  agree  to  pool 
before  a  local  pool  can  be  formed? 

A.     No.    Any  number  of  growers  who  wish  to  pool  can  do  so. 

Q:  If  a  grower  pools  his  wheat  does  he  have  to  pool  his  other  grain, 
too? 

A.  No.  He  can  pool  one  kind  of  grain  and  handle  other  kinds  under 
any  of  the  other  options.  v 

Q.     Is  the  local  pooling  committee  paid  for  its  services? 

A.  That  is  up  to  the  members  who  contribute  grain  to  the  pool.  They 
can  do  as  they  please  about  it. 

Q.  Can  the  grower  pool  one  year  and  sell  under  one  of  the  other 
options  the  next? 

A.  No.  Once  he  decides  to  pool  he  must  dispose  of  his  grain  in  that 
way,  during  the  remainder  of  the  contract  period.  He  can  change  from 
the  sales  or  consignment  method  to  pooling  at  any  time,  however. 


26  U.  S.  Grain  Growers,  Inc. 

Q.  Does  any  percentage  of  grain  in  any  particular  district  have  to 
be  signed  up  with  the  U.  S.  Grain  Growers,  Inc.,  this  year  before  the 
farmers  can  market  their  grain  through  the  U.  S.  Grain  Growers,  Inc.  ? 

A.  The  time  when  the  growers'  contract  will  become  effective  in  each 
district  will  be  determined  by  the  Executive  Committee  and  Board  of 
Directors.  No  arbitrary  percentage  can  be  set  down  for  general  applica- 
tion for  all  districts.  Smaller  quantities  can  probably  be  handled  in  some 
districts  than  can  be  profitably  done  in  others. 


Administration 

of  the 
Company 


Q.  Is  there  any  danger  that  excessive  salaries 
will  be  paid? 

A.  The  directors  are  farmers  and  have  the  usual 
farmer's  common  sense  about  spending  money.  They 
will  not  pay  higher  salaries  than  are  necessary  to 

secure  qualified  men.  Farmers  now  pay  the  salaries  of  the  men  in  the 
grain  trade,  whether  they  realize  it  or  not.  There  are  many  times  as 
many  men  in  the  grain  business,  especially  at  the  terminals,  as  are 
necessary,  and  many  of  the  salaries  paid  are  far  higher  than  any  the  grow- 
ers' association  will  pay.  This  does  not  include  the  profits  made  by  the 
present  grain  companies,  all  of  which  are  paid  by  the  farmers  in  the 
long  run. 

Q.  Will  the  U.  S.  Grain  Growers,  Inc.,  maintain  offices  at  seaboard 
markets  like  Baltimore,  New  York  and  Philadelphia  and  be  in  a  position 
to  compete  so  far  as  price  and  service  go  with  the  exporters  now  operating 
at  these  markets? 

A.  The  export  corporation,  provided  for  in  the  articles  of  incorpora- 
tion, will  set  up  such  offices  as  soon  as  practicable.  The  Canadian  farmers 
were  able  to  export  wheat  at  from  three  to  five  cents  a  bushel  less  than 
private  exporters  had  charged.  There  is  no  good  reason  why  the  farmers 
of  the  United  States  cannot  be  just  as  successful.  An  office  will  not  be 
set  up  until  the  volume  of  business  will  allow  of  giving  the  same  price 
and  service  given  by  private  exporters. 

Q.  Will  offices  be  maintained  at  points  like  Buffalo,  and  Pittsburgh, 
to  take  care  of  the  sales  of  oats  and  other  feeds  into  the  interior  points  in 
such  states? 

A.  Domestic  demand  at  consuming  points  will  be  considered  before 
that  of  export  demand.  Where  there  is  sufficient  business  to  justify  a 
sales  office  to  take  care  of  domestic  buyers,  an  office  or  a  representative, 
will  be  established  at  that  point. 

Q.  How  will  certain  terminal  elevator  exchanges,  that  practically 
control  the  cooperative  selling  of  grain  in  their  respective  localities,  join 


Questions   and  Answers   on  the  Plan  27 

the  U.  S.  Grain  Growers,  Inc.,  with  the  least  expense  and  elimination  of 
red  tape? 

A.  By  effecting  a  contract  with  the  U.  S.  Grain  Growers,  Inc.,  which 
will  lease  their  terminal  and  central  marketing  facilities  to  the  national 
cooperative  marketing  company  for  the  present,  anticipating  a  purchase 
as  soon  as  the  new  company  is  well  organized. 

Q.    What  becomes  of , the  profits  made  by  the  U.  S.  Grain  Growers? 

A.  The  U.  S.  Grain  Growers,  Inc.,  is  organized  under  the  "not  for 
profit"  law.  It  intends  to  handle  and  sell  grain  at  cost.  To  begin  with, 
the  regular  commission  for  handling  grain  will  be  charged.  Any  money 
which  might  be  left  at  the  end  of  the  year,  above  actual  expenses  and  the 
amount  set  aside  for  the  surplus  fund,  will  either  be  invested  in  the  sub- 
sidiary corporations  or  paid  back  to  the  growers  in  proportion  to  the 
amount  of  grain  sold  through  the  organization. 

The  directors  are  authorized  to  deduct  not  more  than  one  per  cent  of 
the  selling  price  of  grain  for  buying  terminal  elevators,  establishing  an 
export  corporation  and  for  similar'  purposes.  When  such  deduction  is 
made,  the  grower  will  be  given  a  certificate  of  investment  covering  the 
amount  of  his  money  used  for  such  purposes.  In  case  the  property  is 
ever  disposed  of,  he  will  receive  his  proportionate  share  of  the  selling 
price. 


Q.     What  is  the  voting  plan  of  the  company? 
A.     The  voting  plan  of  the  U.  S.  Grain  Growers, 


of 
Officers 


Inc.,  vests  the  absolute  control  of  the  company  en- 
tirely in  the  hands  of  its  farmer  members. 

Q.     How  are  the  directors  elected? 

A.  During  the  first  week  in  February  of  each  year,  the  grower  mem- 
bers around  each  shipping  point  will  hold  an  annual  meeting.  Each 
grower  member  has  one  vote.  A  delegate  to  congressional  district  conven- 
tion will  be  elected  at  this  meeting. 

The  congressional  district  conventions  will  be  held  the  third  week  in 
February  and  will  be  made  up  of  one  voting  delegate  from  each  local 
shipping  point.  Bach  of  these  delegates  will  cast  as  many  votes  in  the 
congressional  district  convention  as  there  are  members  in  his  local.  The 
congressional  district  convention  will  then  elect  a  delegate  to  the  national 
convention  which  will  be  held  the  third  Tuesday  in  March. 

At  the  national  convention,  each  delegate  will  cast  as  many  votes  as 
there  are  members  in  his  congressional  district.  The  business  of  the 
national  convention  will  be  to  elect  directors  and  make  any  desired  changes 
in  the  policies  and  by-laws  of  the  organization. 


28 U.  S.  Grain  Growers,  Inc. 

Q.     Who  may  be  directors? 

A.  Actual  grain  growers  who  are  members  of  the  U.  S.  Grain  Growers, 
Inc.  No  person  holding  an  elective  or  appointive  public  office  or  being  a 
candidate  for  such  office  can  be  a  director  or  officer  of  the  company.  In 
case  a  director  or  officer  becomes  a  candidate  for  any  such  office,  he  must 
immediately  resign. 

Q.  Are  officers  and  employees  of  the  U.  S.  Grain  Growers,  Inc., 
bonded  ? 

A.  The  treasurer  and  all  other  officers  and  employees  of  thr  I'.  S. 
Grain  Growers,  Inc.,  whose  duties  include  the  handling  of  money,  securi- 
ties and  other  things  of  value  must  furnish  adequate  bonds.  In  case  the 
directors  fail  to  require  such  bonds,  they  will  be  personally  liable  for  any 
losses.  Likewise,  the  men  who  represent  the  company  in  securing  member- 
ships are  all  bonded. 


Objects 

of  the 

Plan 


Q.  How  will  the  new  marketing  plan  stabilize 
prices  ? 

A.  It  will  not  do  so  all  at  once.  In  time  it  will 
very  largely  wipe  out  daily  and  weekly  fluctuations 
and  minimize  monthly  and  yearly  fluctuations  so  that 

they  will  be  slow  and  gradual,  accurately  reflecting  world  conditions  of 
supply  and  demand.  The  most  important  means  of  stabilizing  the  price 
of  cash  grain  is  to  stabilize  the  movement.  If  cash  buyers  want  a  million 
bushels  of  grain  today  and  a  nlillion  bushels  is  offered  for  sale,  the  price 
will  not  change.  If  a  million  and  a  quarter  bushels  is  offered  the  bottom 
goes  out  of  the  market. 

Farmer  members  of  the  U.  S.  Grain  Growers,  Inc.,  will  have  impor- 
tant help  from  the  statistical  department  of  the  U.  S.  Grain  Growers. 
Inc.,  in  determining  the  time  to  sell.  This  department  will  gather  facts 
about  supply  and  demand  from  every  source  and  from  all  over  the  world. 
Its  trained  experts  will  interpret  these  facts.  This  information  will  be 
furnished  to  each  local  elevator  company  by  mail  and  wire.  It  will  b3 
accurate,  unbiased  information,  not  colored  in  the  interest  of  the  specu- 
lator. The  grain  will  be  routed  to  the  best  markets,  and  offered  only  as 
rapidly  as  the  market  will  take  it  without  depressing  prices  unduly. 

The  plan  is  an  elastic  one.  It  does  not  start  in  a  revolutionary  way. 
It  provides  for  a  gradual  development  of  distribution  by  farmers  them- 
selves. It  will  have  a  stabilizing  influence  on  prices  from  the  start,  and 
that  influence  will  increase  rapidly  until  market  manipulation  and  un- 
necessary waste  has  been  eliminated. 

Q.     What  are  the  chief  objects  of  the  entire  movement? 


Questions   and   Answers   on   the  Plan  29 

A.  To  permit  the  farmer  to  own  and  control  the  agencies  for  market- 
ing his  own  grain;  to  cause  a  more  even,  orderly  shipment  of  grain  to 
the  market,  thereby  preventing  gluts  in  the  market,  and  the  violent  fluc- 
tuations in  market  prices  which  exist  today;  eliminate  speculation  in 
grain  which  further  influence  market  prices  to  the  disadvantage  of  both 
producers  and  consumers;  and  to  furnish  adequate  financial  credit  to 
farmers. 


30 17.  S.  Grain  Growers,  Inc. 

Summary  of  the 
Certificate  of  Incorporation 


The  U.  S.  Grain  Growers,  Inc.,  filed  letters  of  incorporation  on  April  11,  1921, 
with  the  Secretary  of  the  State  of  Delaware.  On  April  18,  a  certificate  of  incor- 
poration was  granted  by  that  State,  creating  a  corporation. 

This  Certificate  of  Incorporation  has  created  an  agricultural  organization 
instituted  for  the  purposes  of  mutual  help  without  having  capital  stock  and  not  to 
be  conducted  for  profit,  to  improve  the  methods  of  preparing,  storing,  and  hand- 
ling agricultural  products  including  grain  and  products  thereof;  to  reduce  the  cost 
of  producing  and  marketing  such  products;  to  reduce  speculation,  manipulation, 
and  waste,  and  all  unnecessary  transactions  in  such  marketing;  to  encourage 
scientific  and  advanced  farming  practice;  to  stimulate  and  advocate  the  planting 
of  the  most  desirable  varieties;  to  increase  the  consumption,- build  up  new  mar- 
kets, and  develop  new  uses  for  such  products;  to  facilitate  the  transportation 
and  the  collection  of  claims  regarding  the  transportation  of  such  products;  to 
market  same  directly  and  with  regularity  so  as  to  furnish  the  same  economically 
to  the  manufacturers  and  users  thereof;  to  preserve  for  the  growers  and  the 
public  their  proper  profits  and  economies;  to  establish  uniform  business  adminis- 
tration and  accounting  methods  among  farmers,  warehouses,  elevators,  and  mem- 
bers of  this  corporation;  to  do  everything  necessary,  suitable,  and  proper  to 
advance  the  interest  and  the  benefit  of  the  growers  of  grain  and  those  engaged 
in  allied,  business. 

To  carry  out  these  purposes  the  corporation  is  authorized  to  do  all  things 
necessary,  including  the  handling  and  marketing  of  grain  and  related  products 
produced  by  its  members,  the  establishing  of  trademarks,  the  organization  and 
control  of  subsidiary  corporations  formed  to  carry  out  the  above  purposes,  and 
the  distribution  of  market  news. 

Membership  in  the  corporation  is  limited  to  producers  of  grain  and  related 
products  and  memberships  are  not  transferable  or  assignable.  Members  of  the 
corporation  are  not  liable  for  any  of  the  acts,  debts  or  liabilities  of  the  corpo- 
ration and  no  special  assessments  can  be  levied  against  its  members,  the  cost  of 
operation  to  be  secured  by  deductions  from  the  proceeds  of  the  sale  of  grain. 
The  control  of  the  corporation  resides  in  the  members,  members'  voting  power  be- 
ing equal.  The  election  of  managing  officials  under  a  representative  plan  is  author- 
ized. The  Board  of  Directors  has  general  control  over  the  affairs  of  the  corpo- 
ration. An  Executive  Committee  is  authorized,  for  the  transaction  of  business 
between  meetings  of  the  Board  of  Directors.  In  general,  the  development  of  the 
various  activities  of  the  corporation  is  left  to  the  Board  of  Directors.  The 
directors  and  officers  are  disqualified  from  holding  State  or  Federal  public  office. 

*  *  *  * 

The  general  effect  of  the  Certificate  of  Incorporation  is  the  creation  of  a  non- 
stock, non-profit  agricultural  organization  which  can  market  grain  produced  by 
its  members,  and  which  extends  the  farmers'  elevator  movement  farther  than 
cooperative  methods  have  thus  far  gone. 


By   Laws 31 

By  Laws  of  tke  U.  S.  Grain  Growers,  Inc. 

Adopted   by    Incorporators,    April   11,    1921,    and 
Approved  by  Board  of  Directors,  April  20,  1921. 

ARTICLE    I. 
Membership. 

Section  1.  Qualifications.  All  persons  who  shall  be  producers  of  grain  and 
related  products,  who  shall  execute  producers'  agreements  as  specified  in  Article 
X  hereof,  and  who  agree  to  conform  to,  and  abide  by,  the  by-laws  and  regulations 
of  this  Association,  shall  be  eligible  for  membership  in  this  Association;  provided, 
however,  that  producers  of  grain  who  have  executed  growers'  contracts  for  the 
exclusive  sale  of  grain  through  any  state-wide  or  interstate  organization  now  in 
existence,  which  is  composed  exclusively  of  grain  growers,  may  be  admitted  to 
membership  in  this  Association  by  resolution  of  the  Board  of  Directors  of  this 
Association  upon  the  execution  of  contracts  between  this  Association  and  the 
aforesaid  state-wide  or  interstate  organization  for  the  exclusive  handling  of  the 
grain  of  the  said  producers  by  this  Association,  the  said  contracts  first  having 
been  approved  by  the  Board  of  Directors  of  the  U.  S.  Grain  Growers,  Inc. 

Section  2.  Fees.  Each  applicant  for  membership  shall,  until  otherwise  pro- 
vided, pay  to  the  Association  an  initiation  fee  of  $10  for  the  creation  of,  and  -own- 
ership of  securities  in,  subsidiary  and  affiliated  companies  and  other  agencies,  for 
the  acquisition  of  terminal  warehouse  facilities,  for  the  securing  of  memberships, 
for  any  other  purpose  authorized  and  deemed  necessary  by  the  Board  of  Directors 
of  the  Association  for  the  immediate  handling  and  marketing  of  grain  and  related 
products,  and  for  organization  and  other  expenses  incidental  to  the  completion  of 
the  organization  of  the  Association;  provided,  however,  that  this  section  as  to  the 
initiation  fee  may  be  hereafter  modified  by  at  least  a  three-fourths  vote  of  the 
Board  of  Directors  of  this  Association. 

Each  applicant  for  membership,  as  a  consideration  of  the  enjoyment  of  the  pri- 
vileges of  membership,  and  as  a  term  and  condition  thereof,  admits  and  agrees 
that  his  initiation  fee  shall  become  and  remain  the  exclusive  property  of  the  Asso- 
ciation, free  of  any  claim  or  demand  upon  his  part,  and  constitute  merely  evidence 
of  good  standing.  The  right  to  enjoy  the  privileges  of  membership  in  this  Asso- 
ciation is  personal  and  not  a  property  right.  Membership  shall  not  be  subject  to 
execution,  is  not  transferable,  and  is  not  liable  for  the  debts  of  a  deceased  member. 

Enjoyment  of  the  privileges  of  membership  shall  continue  during  good  stand- 
ing and  behavior  only. 

Section  3.  Certificate.  A  certificate  of  membership  shall  be  furnished  to  each 
member  in  the  form,  and  authenticated  by  the  persons  designated  by  the  Board  of 
Directors,  with  the  seal  of  the  Association  affixed  thereto. 

Section  4.  Voting:  Power.  The  voting  power  and  the  control  of  this  Association 
shall  inherently  reside  in  the  members  thereof,  The  voting  power  of  all  members 
shall  be  equal. 

Section  6.  Exemption  from  Execution.  The  property  of  this  Association  shall 
not  be  subject  to  execution  or  liable  for  the  debts  of  any  member  of  the  Associa- 
tion. 

Section  6.  Termination.  The  retirement  of  a  member  from  the  business  of 
grain  production  shall  automatically  suspend  his  membership  in  this  Association. 
Members  may  be  expelled  from  membership  for  breach  of  contract,  or  for  acts  in- 
jurious to  the  interests  of  the  Association.  Written  charges  shall  be  prepared  by 
the  Voting  Unit,  as  hereinafter  defined,  or  by  any  officer  of  the  Association,  and 
served  upon  such  member  ten  days  before  the  date  of  the  proposed  hearing,  when 
the  charges  shall  be  tried  before  the  Voting  Unit.  Upon  conviction  by  the  Voting 
Unit,  appeals  may  be  successively  prosecuted  to  the  ensuing  Congressional  District 
Convention  and  to  the  National  Convention.  Upon  final  conviction,  the  member 
shall  be  denied  further  use  of  membership  privileges  except  to  conclude  unfinished 
transactions. 


32  U.  S.  Grain  Growers,  Inc. 

ARTICLE    II. 
Representative    Government. 

Section  1.  Voting  Units.  The  members  of  this  Association,  Tor  purposes  of  the 
government  thereof,  shall  be  organized  into  Voting  Units,  whose  headquarters 
shall  be  at  the  respective  shipping  points.  The  members  of  the  Association  who 
are  patrons  of  each  local  elevator  company  or  local  grain  growers'  association 
shall  constitute  a  Voting  Unit;  provided,  however,  that  the  Board  of  Directors 
may  on  the  application  of  any  growers,  and  subject  to  its  discretion,  transfer  them 
to  some  other  Voting  Unit.  Each  member  shall  belong  to  but  one  Voting  Unit. 
Each  Voting  Unit  shall  meet  annually  on  the  first  Tuesday  of  February,  and  shall 
have  such  organization  as  it  shall  select,  subject  to  the  approval  of  the  President 
of  the  Association. 

Section  2.  Congressional  District  Conventions.  The  members  of  each  Voting 
Unit  shall  assemble  and,  by  a  majority  vote,  elect  a  delegate  to  a  convention  of  all 
such  delegates  in  the  Congressional  District  in  which  the  said  Voting  Units  are 
located,  to  be  known  as  the  Congressional  District  Convention,  provided  that  in 
any  Congressional  District  in  which  there  are  not  five  or  more  local  Voting  Units, 
such  District  may  with  the  approval  of  the  Board  of  Directors,  meet  in  convention 
with  one  of  the  adjacent  districts;  and  provided  further,  that  any  Voting  Unit  may 
secure  a  transfer  to  an  adjacent  Congressional  District  by  application  to  the  Board 
of  Directors  and  subject  to  the  approval  of  said  Board.  Congressional  Districts 
shall  conform  substantially  to  the  political  subdivisions  so  described  and  in  effect 
at  the  time  the  aforesaid  Congressional  District  conventions  shall  be  held.  The 
Secretary  of  each  Voting  Unit  shall  immediately  transmit  to  the  Secretary  of  the 
Association  the  name  of  the  delegate  so  elected.  Each  Congressional  District  con- 
vention shall  convene  the  third  week  of  February  of  each  year  at  a  time  and  place 
in  the  said  Congressional  District  to  be  named  specifically  in  the  notice  calling 
said  convention.  The  Congressional  District  convention  shall  be  called  to  order  by 
some  delegate  present  appointed  by  the  President  of  the  Association;  or  in  the 
absence  of  such  delegate,  by  any  other  delegate  present;  whereupon  a  Chairman 
and  Secretary  shall  be  elected;  and  if  a  majority  of  the  members  residing  in  the 
Congressional  District  be  represented  by  delegates  duly  chosen,  a  quorum  shall  be 
declared  assembled,  and  the  Convention  by  a  majority  vote  shall  elect  one  delegate 
and  one  alternate  to  the  National  Convention.  The  Secretary  shall  at  once  trans- 
mit to  the  Secretary  of  the  Association  a  transcript  of  all  proceedings,  and  furnish 
the  persons  who  shall  be"  elected  delegate  and  alternate  proper  credentials. 

If,  for  any  reason,  a  delegate  is  unable  to  attend  the  National  Convention,  the 
duly  elected  and  qualified  alternate  for  said  delegate  shall  automatically  become 
the  delegate  in  his  stead,  and  all  provisions  of  these  By-laws  referring  to  the  pow- 
ers and  duties  of  delegates  to  the  National  Convention  shall  be  deemed  to  refer  to 
such  alternate  acting  in  the  capacity  of  a  delegate  as  above  stated. 

Section  3.  National  Convention.  The  delegates  from  the  Congressional  District 
Convention  shall  assemble  in  National  Convention  and  there  shall  elect  by  majority 
vote  directors  to  fill  all  vacancies  in  the  Board  of  Directors.  Said  National  Conven- 
tion shall  be  the  supreme  tribunal  and  convention  of  the  Association  and  shall 
constitute  the  annual  members'  meeting.  Each  of  the  delegates  provided  for  in 
this  and  the  preceding  section  shall  be  the  agent  or  attorney  in  fact  of  each  of 
his  constituents,  and  shall  vote  the-aggregate  membership  of  his  said  constituency. 

Section  4.  Time  and  Place  of  Meetings  ami  Conventions.  The  annual  meetings 
of  the  members  of  this  Association  shall  be  held  at  Chicago,  Illinois,  commencing 
on  the  third  Tuesday  of  March  in  each  year.  The  members  of  the  Association 
shall  select  duly  accredited  representatives,  agents,  or  attorneys  in  fact,  who 
shall  be  known  as  delegates,  to  cast  their  ballots  for  directors  and  to  cast  their 
votes  on  all  propositions  submitted  at  said  annual  meetings  known  as  National 
Conventions,  as  described  in  the  preceding  section. 

The  places  and  dates  of  meetings  of  the  Congressional  District  Conventions  shall 
be  fixed  by  resolution  of  the  Board  of  Directors  and  copies  thereof  shall  be  mailed 
to  the  Secretaries  of  the  Voting  Units  in  the  respective  Congressional  Districts 
thirty  days  prior  to  the  date  fixed  for  Voting  Unit  meetings.  The  Secretary  of 
each  Voting  Unit  shall  mail  to  each  member  of  the  said  Voting  Unit  a  copy  of  the 
said  notice  seven  days  prior  to  the  date- of  the  meeting.  The  Secretary  of  the 


By   Laws  33 


Association  shall,  at  least  seven  days  prior  to  the  date  of  the  Congressional  Con- 
ventions in  each  district,  send  by  registered  mail  to  each  duly  accredited  delegate 
to  each  Congressional  District  Convention  a  notice  of  the  time  and  place  of  said 
convention.  In  case  the  date  set  for  annual  meetings  of  Voting  Units,  Congres- 
sional District  or  National  Conventions  shall  fall  on  a  holiday  in  the  State  where 
the  meeting  is  to  be  held,  the  meeting  shall  be  held  on  the  second  succeeding  busi- 
ness day. 

Section  5.  Manner  of  Voting.  The  delegate  representing  the  Voting  Unit  shall 
cast  one  vote  for  each  membership  in  such  Unit,  each  delegate  from  the  Congres- 
sional District  Conventions  shall  cast  one  vote  for  each  membership  in  such  con- 
gressional district,  and  by  joining  this  Association  each  member  irrevocably  as- 
sents to  this  manner  of  selection  of  Directors  and  empowers  his  Voting  Unit 
delegate  and  his  congressional  district  delegate  to  act  for  him  and  to  cast  his  vote 
in  the  Congressional  District  and  National  Conventions.  No  membership  shall  be 
voted  at  any  of  these  meetings  which  shall  have  been  acquired  within  twenty  days 
next  preceding  such  meeting  or  election. 

Section  6.  Quorum.  At  any  meeting  duly  called  and  held,  a  majority  in  num- 
ber of  memberships  thus  represented  shall  be  deemed  a  quorum  for  the  transaction 
of  business,  except  at  the  annual  meetings  of  the  Voting  Units  duly  called,  at 
which  time  20  per  cont  of  the  members  of  the  Association  belonging  to  that  Vot- 
ing Unit  shall  constitute  a  quorum  for  the  purpose  of  electing  a  delegate  to  the 
Congressional  District  Convention. 

Section  7.  Term  of  Delegates.  The  delegates  and  alternates  elected  to  the 
National  Convention  shall  be  deemed  elected  for  the  term  of  one  year,  and  shall 
serve  and  sit  in  any  specially  called  National  Convention  within  the  year  follow- 
ing their  election,  in  accordance  with  provisions  herein  stated. 

Section  8.  Duties  of  Secretaries.  The  secretary  of  each  meeting  of  Voting 
Units  and  of  Congressional  District  Conventions  shall  make  a  record  of  the  selec- 
tion of  the  delegate  and  alternate  from  his  constituency  and  furnish  the  delegate 
and  alternate  so  elected  a  certificate  in  form  to  be  prepared  by  the  Board  of  Di- 
rectors of  the  fact  of  the  election  of  such  delegate  and  alternate,  transmitting  a 
copy  thereof  to  the  Secretary  of  the  Association. 

Section  9.  Salaries  and  Expenses.  Delegates  to  Congressional  District  Con- 
ventions and  delegates  to  the  National  Convention  shall  serve  without  compensa- 
tion from  the  Association.  The  Board  of  Directors  may  authorize  the  payment  to 
such  delegates  of  their  necessary  traveling  expenses. 

Section  10.  Adjourned  Meetings.  If  less  than  a  quorum  shall  be  in  attendance 
at  the  time  for  which  any  meeting  herein  provided  for  shall  have  been  called,  the 
meeting  may,  after  the  lapse  of  at  least  one  hour,  be  adjourned  from  time  to  time, 
or  day  to  day,  by  a  majority  of  the  members  or  delegates  present;  after  three 
consecutive  days  those  present  shall  constitute  a  quorum. 

Any  meeting  at  which  a  quorum  is  present  may  also  be  adjourned  in  like  man- 
ner for  such  time  or  upon  such  call  as  may  be  determined  by  vote. 

At  any  adjourned  meeting  at  which  a  quorum  shall  attend  any  business  may 
be  transacted  which  might  have  been  transacted  if  the  meeting  had  been  held  as 
originally  called. 

Failure  to  give  proper  notice  by  mail,  or  any  other  failure  on  the  part  of  any 
local,  district  or  national  official,  or  any  local  or  district  convention,  to  strictly  ob- 
serve the  preceding  regulations  shall  not  invalidate  the  actions  of  the  National 
Conventions.  At  such  time  and  place  as  previously  stated  those  delegates  who 
do  show  proper  credentials  shall  proceed  with  the  transaction  of  the  business  of 
the  Association  at  the  National  Convention,  and  their  action  shall  be  binding  upon 
the  Association. 

ARTICLE    III. 
Board    of   Directors. 

Section  1.  Election.  The  Board  of  Directors  shall  consist  of  twenty-one  mem- 
bers,  to  be  elected  by  ballot  at  the.  Annual  Conventions  for  the  following  terms 
of  office:  Beginning  with  the  first  annual  meeting  to  be  designated  the  first 
National  Convention,  as  provided  for  in  these  By-Laws,  the  directors  of  this  cor- 


34  V.  S.  Grain  Growers,  Inc. 

poration  shall  be  divided  into  two  classes,  as  nearly  equal  as  possible;  the  terms 
of  office  of  those  of  the  first  class  to  expire  at  the  close  of  the  annual  meeting 
next  ensuing-;  of  the  second  class,  one  year  thereafter;  and  at  each  annual  election 
held  after  the  first  convention  directors  shall  be  chosen,  except  to  fill  unex- 
pired  terms,  for  the  full  term  of  two  years  to  succeed  those  whose  terms 
expire.  The  Board  of  Directors  may  provide  for  the  nomination  of  directors  by 
districts  on  an  equitable  basis.  The  directors,  except  those  constituting-  the  first 
Board  of  Directors,  shall  subscribe  and  swear  to  an  oath,  before  entering  upon 
their  duties,  binding  themselves  to  the  due  performance  of  the  same,  in  such  form 
as  may  be  prescribed  by  the  Board  of  Directors. 

Section  2.  Meetings.  Regular  meetings  of  the  directors  shall  be  held  in  the 
City  of  Chicago,  State  of  Illinois,  on  the  first  Tuesday  of  July,  October,  January, 
and  at  the  close  of  the  National  Convention  of  each  year.  Special  meetings  may 
be  called  at  Chicago,  or  elsewhere,  upon  order  of  the  President  or  petition  of  one- 
third  of  the  directors,  specifying  the  business  to  be  transacted.  Notice  of  special 
meetings  shall  be  mailed  by  the  President  or  Secretary  to  each  director's  postoffice 
address  at  least  15  days  or  wired  at  least  5  days  before  the  date  of  the  proposed 
meeting. 

Section  3.  Powers.  The  Board  of  Directors  shall  have  complete  management 
of  the  Association.  The  Board  of  Directors  may  appoint  an  executive  committee 
from  its  own  membership,  and  require  the  said  committee  to  transact  such  admin- 
istrative business  and  conduct  such  investigation  as  the  Board  of  Directors  may 
authorize.  The  power  to  borrow  money  shall  be  exercised  only  by  the  authority 
of  the  Board  of  Directors,  two-thirds  of  the  members  being  present  and  voting  for 
the  same.  The  Board  of  Directors  may  fill  vacancies  in  its  membership  until  the 
next  following  National  Convention.  The  Board  of  Directors  shall  choose,  and  fix 
the  salaries  of,  the  officers  of  the  Association,  as  hereinafter  named,  each  of  whom, 
except  the  Secretary  and  Treasurer,  must  be  a  director,  and  shall  prescribe  the 
form  of  the  Association  seal.  The  Board  of  Directors  shall  by  resolution  provide 
compensation  for  directors  except  as  provided  in  Article  IV,  Section  1,  of  these 
By-laws. 

Section  4.  Executive  Committee.  During  the  intervals  between  the  meetings 
of  the  Board  of  Directors,  the  Executive  Committee  shall  have  and  may  exercise 
such  powers  as  may  be  lawfully  committed  to  it  by  the  Board  of  Directors. 

ARTICLE  IV. 
Officers. 

Section  1.  Designation.  The  officers  of  the  Association  shall  be  President,  First 
Vice  President,  Second  Vice  President,  Third  Vice  President,  Secretary  and  Treas- 
urer. Each  of  said  officers  shall  be  a  director  of  the  Association  except,  however, 
the  Secretary  and  Treasurer  may  be  directors  or  not,  subject  to  the  discretion  of 
the  Board  of  Directors.  The  compensation  and  expenses  of  all  officers  (including 
the  executive  committee,  President  and  Vice  Presidents,  but  excluding  members  of 
the  Board  of  Directors  not  occupying  such  positions)  shall  be  fixed  by  the  Board 
of  Directors.  No  officer  affected  by  this  provision  shall  be  permitted  to  vote  on 
the  amount  of  compensation  to  be  paid  to  said  officers. 

Section  2.  The  President.  The  President  shall  preside  over  all  meetings  of  the 
National  .Convention  and  of  the  Board  of  Directors,  shall  execute  personally  or 
through  duly  authorized  agent,  in  behalf  of  the  Association  all  contracts,  deeds 
and  other  instruments  which  shall  have  been  approved  by  the  Board  of  Directors, 
and  shall  have  general  supervision,  and  administrative  control  of  all  of  the  affairs 
of  the  Association,  and  shall  give  all  his  time  to  the  affairs  of  the  Association. 

Section  3.  The  Vice  Presidents.  In  the  absence  or  disability  of  the  President 
for  any  cause,  his  duties  shall  devolve  upon,  and  be  discharged  by,  the  respective 
vice  presidents  in  the  order  of  their  official  seniority.  The  Vice  Presidents  shall 
perform  such  administrative  duties  as  may  be  delegated  to  them  by  the  Board  of 
Directors. 

Section  4.  The  Secretary.  The  Secretary  shall  be  the  custodian  of  all  of  the 
books,  papers,  records,  documents,  official  seal  and  property  of  the  Association. 
He  shall  conduct  by  himself,  or  through  such  assistant  secretaries  and  other  sub- 
ordinates as  shall  be  authorized  by  the  Board  of  Directors,  such  correspondence  of 


By   Laws  35 


the  Association  as  may  be  delegated  to  him  by  the  Board  of  Directors;  serve  or 
cause  to  be  served,  printed  and  published  such  notices  as  shall  be  required  by  law, 
by  these  by-laws  and  by  resolutions  of  the  Board  of  Directors;  shall  keep  the  cor- 
porate records;  shall  act  as  Secretary  of  the  National  Convention,  the  Board  of 
Directors  and  the  Executive  Committee;  and  shall  perform  such  other  administra- 
tive duties  as  shall  be  assigned  to  him  by  the  Board  of  Directors. 

Section  5.  The  Treasurer.  The  Treasurer  shall  have  charge  of  the  funds  of 
the  Association,  shall  perform  the  duties  usually  attaching  to  that  position  and 
such  other  duties  as  may  be  assigned  by  the  Board  of  Directors. 

Section  6.  Suspension.  Any  officer  who  shall  be  ten  days  in  default  in  the  per- 
formance of  his  duty  may  be  suspended  from  his  position  and  compensation  by  the 
Board  of  Directors  and  shall  be  reinstated  only  upon  satisfactory  evidence  of  the 
performance  of  such  duty. 

Section  7.  Qualifications.  The  President,  Vice  President  and  Directors  (except 
the  first  Board  of  Directors  and  officers)  must  be  members  of  the  U.  S.  Grain 
Growers,  Inc.  No  person  holding  elective  or  appointive  political  office  of  the  fed- 
eral or  state  government,  or  being  a  candidate  for  such  office,  shall  be  eligible  to 
become  a  member  of  the  Board  of  Directors.  In  case  any  Director  or  officer  shall 
become  a  candidate  for  any  elective  state  or  federal  office  or  shall  accept  appoint- 
ment to  such  office,  his  office  in  the  Association  automatically  shall  be  vacated. 

ARTICLE    V. 
Employes  and  Agents. 

Section  1.  General  Authorization.  The  Association  shall  have  a  General  Man- 
ager and  such  agents  and  employes,  acting  under  his  direction,  as  the  Board  of 
Directors  may  from  time  to  time  provide.  The  Board  of  Directors,  directly  or 
through  duly  authorized  representatives,  shall  appoint  or  remove  such  General 
Manager,  agents  and  employes,  shall  prescribe  their  duties,  fix  their  compensation, 
and  shall  require  those,  including  the  Treasurer,  members  of  Local  Pooling  Com- 
mittees and  others  whose  duties  include  the  handling  of  money,  securities,  or  other 
things  of  value,  to  execute  and  file  with  the  President  good  and  sufficient  bonds  in 
amounts  fixed  by  the  Executive  Committee  with  securities  approved  by  it.  Failure 
of  the  Board  of  Directors  to  require  such  bonds  shall  make  them  personally  liable 
for  any  loss  thereby  occasioned. 

ARTICLE   VI. 

• 
Departments. 

Section  1.  General  Authorization.  There  shall  be  established  as  deemed  advis- 
able by  the  Board  of  Directors  the  following  departments  of  the  Association:  Sales 
Department,  Transportation  Department,  Organization  Department,  Legal  Depart- 
ment, Finance  Department,  Statistical  Department,  Information  Department,  a 
Pooling  Department  for  each  kind  of  grain  pooled  by  any  number  of  grower  mem- 
bers, to  be  under  the  charge  of  an  expert  in  the  handling  of  that  kind  of  grain, 
and  such  other  departments  as  may  from  time  to  time  be  considered  advisable  by 
the  Board  of  Directors. 

ARTICLE    VII. 

Offices. 

Section  1.  Offices.  A  principal  office  of  the  Association  shall  be  in  the  City  of 
Wilmington,  County  of  New  Castle,  State  of  Delaware;  and  the  name  of  the  resi- 
dent agent  in  charge  thereof  is  Herbert  E.  Latter,  No.  7  W.  Tenth  Street,  Wilming- 
ton, Delaware. 

The  corporation  may  also  have  an  office  in  the  City  of  Chicago,  State  of  Illinois, 
and  also  offices  at  such  other  places  as  the  Board  of  Directors  may  from  time  to 
time  appoint  or  the  business  of  the  corporation  may  require. 

ARTICLE  VIII. 

Financial. 

Section  1.  Depositories.  The  Board  of  Directors  shall  designate  depositories 
for  the  funds  of  the  Association,  and  all  interest  accruing  from  funds  of  the  Asso- 
ciation shall  be  the  property  of  the  Association. 


36  U.  S.  Grain  Growers,  Inc. 

Section  2.  Certificates.  The  Board  of  Directors  shall  provide  out  of  the  pro- 
ceeds from  the  sale  of  grain  for  the  acquisition  by  itself,  or  through  subsidiaries 
and  other  agencies,  of  facilities  necessary  for  the  efficient,  prompt,  and  economical 
handling,  processing,  transporting,  and  exporting  of  the  grain  of  its  members;  and 
shall  issue  certificates  of  deduction  representing  the  same,  in  such  form,  in  the 
manner,  and  at  such  times  as  the  Board  of  Directors  shall  determine. 

The  said  certificates  shall  be  assignable  by  endorsement;  but  shall  not  be 
deemed  as  obligations  of  the  Association  with  definite  or  other  maturity;  they  shall 
not  bear  interest  and  shall  not  represent  any  obligations  or  rights  other  than  a 
proportionate  ownership  in  certain  assets  held  by  the  Association,  which  shall  not 
be  separable  or  subject  to  distribution  during  the  life  of  the  Association,  except  at 
the  option  of  the  Board  of  Directors. 

Section  3.  Audit  Report.  There  shall  be  an  audit  of  the  financial  records  of 
the  Association  made  by  a  reputable  and  competent  accounting  firm  at  least  annu- 
ally, whose  reports  thereof  shall  be  transmitted  to  the  President  and  by  him  re- 
ported to  the  next  ensuing  National  Convention  with  information  concerning  the 
affairs  of  the  Association. 

Section  4.  Fiscal  Year.  The  fiscal  year  shall  begin  the  first  day  of  January 
in  each  year,  until  otherwise  ordered  by  the  Board  of  Directors. 

ARTICLE   IX. 
Subsidiary   Corporations. 

Section  1.  General  Authorization.  The  Association  may,  in  the  discretion  of 
the  Board  of  Directors,  provide  for  the  organization  of  subsidiary  corporations 
for  the  carrying  out  of  the  purposes  of  the  Association,  and  for  the  holding  of 
securities  of  said  subsidiaries.  Such  subsidiary  corporations  may  include  corpora- 
tions for  warehousing,  for  the  export  of  grain,  for  the  financing  of  operations 
contemplated  by  the  Association,  and  for  any  other  purpose  deemed  by  the  Board 
of  Directors  essential  to  the  carrying  out  of  the  plans  for  which  this  Association 
is  organized.. 

ARTICLE   X. 
Operations. 

Section  1.  General.  The  operations  of  this  Association  shall  consist  of  the 
marketing  of  grain  and  related  products  by  virtue  of  contracts  with  state-wide  or 
interstate  grain  growers'  associations,  with  farmers'  cooperative  elevator  compa- 
nies, or  with  local  cooperative  associations  to  be  formed  where  local  farmers'  co- 
operative elevators  meeting  the  requirements  established  in  the  contracts  with 
grower  members  do  not  exist,  which  companies  and  associations  in  turn  have  con- 
tracted with  growers  who  are  members  of  this  Association,  or  where  such  com- 
panies or  such  associations  do  not  exist,  the  Association  may  contract  directly  With 
individual  members  for  direct  shipments,  and  with  independent  dealers  for  the 
weighing,  loading,  and  handling  of  the  grain  of  such  members. 

Section  2.  The  Plan.  In  furtherance  of  these  operations,  the  Association  may 
provide,  as  considered  advisable  by  the  Board  of  Directors: 

(a)  Branch   sales   offices   at   important   grain   markets   to    handle   the    grain    for 
each   natural  grain   district; 

(b)  Terminal   elevator  service   in   connection   with   sales   offices,    either  by  con- 
tractual   arrangements   for    same,    or   through    the    organization    of   a    company,    or 
companies,  which  may  lease,   buy  or  build  terminal   elevators; 

(c)  Facilities  for  financing  the  marketing  of  grain  through  the  organization  of 
a  finance   corporation  whose  capital  stock   shall   be  subscribed  to  by  the  members, 
so  far  as  possible; 

(d)  Facilities  for  marketing  the  exportable  surplus  of  grain  and  related  prod- 
ucts; 

(e)  Service    departments    furnishing    information    covering    local,    national    and 
world-wide   conditions   affecting   the   grain    trade;   also    information   and   service    in 
connection   with   transportation,    legal,   statistical   and   other    problems. 

Section  3.  Working  Capital.  The  initial  working  capital  of  the  Association 
with  which  to  provide  for  the  creation  of,  and  ownership  of  securities  in,  subsid- 


By   Laws  37 


iary  and  affiliated  companies  and  other  agencies,  for  the  acquisition  of  terminal 
warehouse  facilities,  for  any  other  purpose  authorized  and  deemed  necessary  by 
the  Board  of  Directors  of  the  Association  for  the  immediate  handling  and  market- 
ing of  grain,  for  organization  and  other  expenses  incidental  to  the  completion  of 
the  organization  of  the  Association,  and  for  such  other  purposes  as  are  authorized 
by  the  Board  of  Directors,  within  the  lawful  power  of  the  Association,  will  be 
secured  through  the  membership  fee  of  the  growers  as  provided  in  Article  I,  Sec- 
tion 2  of  these  By-laws.  Subsequent  funds  will  be  secured  by  deduction  of  certain 
amounts  or  percentages  of  the  receipts  from  grain  sold  by  or  through  the  Asso- 
ciation, as  provided  in  the  standard  contract  between  the  Elevator  Company  and 
the  Association. 

Section   4.     Contracts.     There   shall   be,   among    others,   two   series   of   contracts: 

(1)  Between   the  respective  members  and   the   local   elevator  companies   or   the 
grain  growers'  associations;  and 

(2)  Between   the   respective   local   companies   or   associations   and   this   Associa- 
tion. 

Local  companies  or  associations  shall  be  construed  to  include  farmers'  co-opera- 
tive elevator  companies,  paying  patronage  dividends  and  organized  under  the  co- 
operative laws  of  the  State  where  operating;  or  where  there  is  no  such  law  then 
such  farmers'  elevators  as  meet  the  requirements  of  the  Association  as  to  truly 
co-operative  companies. 

In  communities  where  there  is  a  stock  company  farmers'  elevator,  the  stock- 
holders or  directors  of  such  elevator  who  are  members  of  the  Association  may  or- 
ganize a  grain  growers'  association  to  become  the  local  contracting  body  and 
supervise  the  handling  and  financing  of  members'  grain.  Where  the  stockholders 
or  directors  of  such  farmers'  elevator  do  not  organize  such  grain  growers'  associa- 
tion, the  Association  shall  make  no  attempt  to  organize  such  community  prior  to 
January  1,  1924. 

Said  local  associations  shall  arrange  for  the  use  of  local  elevator  facilities, 
either  by  contract,  construction,  purchase  or  otherwise. 

Contracts  between  the  members  of  this  Association  and  the  local  farmers'  co- 
operative elevator  company  or  the  local  association  shall  be  executed  in  standard 
form,  providing  for  the  exclusive  handling  of  the  members'  grain  through  the  fa- 
cilities of  this  Association. 

In  all  matters  connected  with  the  securing  of  membership  and  contracts  and 
the  handling  of  grain  in  local  communities,  the  Association  shall  co-operate  to  the 
fullest  possible  extent  with  existing  co-operative  elevators. 

Section  5.  Grading-  and  Inspection.  The  Board  of  Directors  shall  prepare  and 
recommend  rules  and  regulations  concerning  the  grading  and  inspection  of  grain 
by  local  elevators  and  associations,  together  with  methods  for  enforcing  the  same, 
not  in  conflict  with  state  and  federal  rules,  regulations  and  statutes. 

Section  6.  Sales  and  Collections.  The  Board  of  Directors  shall  establish  meth- 
ods for  the  sale  of  grain  by  and  through  the  Association,  and  provide  for  the  col- 
lection and  remittance  of  money  due. 

Section  7.  Advisory  Sub-Committees.  The  collection  of  information  from  all 
parts  of  the  earth,  .and  dissemination  thereof  to  the  members  concerning  sowing, 
planting,  preparing  of  soil,  selection  of  varieties,  cultivation,  harvesting,  storing 
and  marketing  of  grain,  and  all  other  matters  pertaining  to  efficient  and  profitable 
farming  shall  be  objects  of  especial  solicitude  to  the  Association,  and  those  sub- 
jects in  relation  to  particular  grains  shall  be  assigned  to  such  sub-committees  of 
the  Board  of  Directors  as  to  it  shall  seem  fit.  The  powers  of  such  sub-committees 
shall  be  advisory  only. 

ARTICLE   XI. 

Notice. 

Section  1.  Presumption  of  Notice.  Whenever  any  member,  delegate  or  director 
is  present  at  any  meeting  it  shall  be  presumed  that  he  has  received  legal  notice  of 
such  meeting. 

Section  2.  Notice  and  Waiver  of  Notice.  Whenever  any  notice  is  required  by 
law  or  by  these  By-Laws,  personal  notice  is  not  meant  unless  expressly  so  stated, 
and  any  notice  so  required  shall  be  deemed  to  be  sufficient,  unless  otherwise  speci- 


38  U.  S.  Grain  Growers,  Inc. 

fied,  if  given  by  depositing  the  same  in  a  postoffice  box  in  a  sealed  postpaid  wrap- 
per, addressed  to  the  person  entitled  thereto  at  his  last  known  postoffice  address, 
and  such  notice  shall  be  deemed  to  have  been  given  on  the  day  of  such  mailing. 
Any  notice  required  to  be  given  under  these  By-Laws  may  be  waived  by  the  per- 
son entitled  thereto. 

ARTICLE   XII. 
Conduct  of   Business. 

Section  1.  Order  of  Business.  The  order  of  business  for  all  meetings  shall  be 
as  follows: 

1.  Roll  call, 

2.  Reports  of  officers, 

3.  Reports  of  standing  committees, 

4.  Reports  of  special   committees, 

5.  Old   business, 

6.  New  business,  • 

7.  Elections. 

Section  2.  Rules  of  Order.  Roberts'  Rules  of  Order  shall  govern  the  delibera- 
tions of  all  meetings  herein  provided  for,  except  as  may  be  otherwise  provided  in 
the  Certificate  of  Incorporation  or  in  these  By-Laws. 

ARTICLE:  xin. 

Amendments. 

These  By-Laws  may  be  altered  or  amended  at  any  regular  National  Convention 
of  the  Association,  by  an  affirmative  two-thirds  vote,  provided  that  a  copy  of  the 
proposed  amendment  with  a  request  for  its  consideration  shall  be  filed  with  the 
Secretary  of  the  Association,  by  any  member  of  the  Board  of  Directors,  or  by  any 
duly  elected  delegate  to  the  said  convention,  at  least  fifteen  clear  days  before  the 
date  of  the  convention.  The  Secretary  shall  thereupon  mail  immediately  a  copy  of 
the  said  proposed  amendment  to  each  delegate  who  shall  have  been  duly  elected 
to  the  convention.  No  other  amendments  shall  be  considered  by  the  convention, 
excepting  slight  changes  in  phraseology,  not  changing  the  purport,  may  be  made 
in  the  proposed  amendment,  and  the  Board  of  Directors,  by  a  majority  vote,  may 
recommend  other  changes  in  these  By-Laws  at  tile  time  the  convention  is  in  ses- 
sion. 


Grain  Growers'  Contract 

Revised   Form 


THIS  AGREEMENT  made  and   entered  into   this day   of 

,    19 ,   by   and    between ..... 


(Here  insert  name  of  Elevator  Company  or  Grain  Growers'  Association  with  whom 

the  Grower  contracts) 
a  corporation   (or)    an  association  duly  organized  and  existing  under  the  laws  of 

the  State  of „ ,    (hereinafter  referred  to  as  the  Elevator 

Company),  and  having  its  principal  place  of  business  at , 

party  of  the  first  part,  and  the  undersigned  producer  of  grain  as  owner   (entitled 

to  crop  rental),  or  as  tenant,  of  land  located  in  the  County  of 


State   of ,    (hereinafter   referred   to   as   the    Grower), 

party  of  the  second  part, 
WITNESS  ETH: 


Grain    Growers     Contract  39 

THAT  WHEREAS  the  Elevator  Company  is  the  owner  of,  or  has  contracted  for 
the  use  of,  facilities  for  weighing,  grading,  storing  and  shipping  grain  in  the 
county  aforesaid,  and  has  by  contract  with  the  U.  S.  Grain  Growers,  Inc.  (herein- 
after referred  to  as  the  U.  S.  Association),  appointed  the  U.  S.  Association,  an  agri- 
cultural organization,  instituted  for  the  purposes  of  mutual  help  and  not  having 
capital  stock  or  conducted  for  profit,  as  its  exclusive  sales  agent  in  the  marketing 
of  grain  of  the  members  of  said  U.  S.  Association,  in  order  to  correct  the  present 
wasteful  and  uneconomic  methods  of  handling  grain,  and  in  order  that  the  said 
grain  can  be  marketed  and  distributed  on  a  cost  basis;  and 

Whereas  the  Grower  is  a  bona  fide  producer  of  grain  by  virtue  of  owning  or 
operating  farm  land,  is  entitled  to  the  ownership  and  control  of  all  or  a  part  of 
the  grain  produced  thereon,  and  is  a  member  of  the  U.  S.  Association;  and 

Whereas  the  Grower  desires  to  sell,  and  the  Elevator  Company  desires  to  pur- 
chase, or  handle  for  sale,  all  the  grain  that  shall  be  produced  as  hereinafter  pro- 
vided: 

NOW  THEREFORE,  the  parties  agree: 

In  consideration  of  the  mutual  obligations  of  the  respective  parties  hereto,  of 
similar  agreements  between  other  grain  growers  and  the  Elevator  Company,  of  the 
outlays  and  expenses  incurred,  and  to  be  incurred,  by  the  Elevator  Company  in 
carrying  out  the  purposes  of  this  agreement,  and  in  consideration  of  the  benefits 
derivable  from  the  contractual  affiliations  of  the  Elevator  Company  with  the  U.  S. 
Association: 

Section  1.  The  Elevator  Company  agrees  that  it  shall  provide  by  ownership, 
lease  or  otherwise,  facilities  for  weighing,  grading,  storing  and  marketing  grain; 
that  it  shall  receive  and  handle  as  hereinafter  specified,  or  shall  purchase  at 
prices,  and  upon  such  terms,  as  are  hereinafter  set  forth,  all  the  grain  hereinafter 
mentioned  tendered  to  it  by  the  Grower  in  accordance  herewith;  that  it  shall  mar- 
ket all  said  grain  through  the  U.  S.  Association  according  to  the  terms  and  condi- 
tions of  the  contract  between  the  U.  S.  Association  and  the  Elevator  Company, 
which  is  attached  hereto  and  made  a  part  hereof  as  though  copied  herein. 

This  contract  shall  govern  all  the  grain  named  in  Section  23,  which  is  con- 
trolled by  the  Grower,  and  produced  upon  land  described  in  the  preamble  of  this 
agreement  which  he  now  owns,  or  shall  hereafter  own  or  operate  during  the  life 
of  this  contract,  and  all  such  grain  as  he  now  has  in  possession,  but  not  grain  re- 
quired and  used  by  the  Grower,  or  sold  by  him  locally  for  local  use  for  seed  or 
feed,  or  sold  otherwise  with  the  written  approval  of  the  U.  S.  Association. 

Section  2.  During  the  life  of  this  contract  the  Grower  agrees  to  deliver  and 
sell  to  the  Elevator  Company,  or  otherwise  market  through  said  company,  all  the 
grain  covered  by  this  contract,  and  grown  upon  the  land  above  described,  at  a 
price  to  be  determined  as  hereinafter  set  forth. 

Section  3.  It  is  hereby  agreed  that  nothing  in  this  contract  shall  deprive  the 
Grower  of  control  in  any  degree  over  his  own  acreage  or  production. 

Section  4.  This  contract  shall  become  effective  with  respect "  to  its  provisions 
concerning  grain,  10  days  after  receipt  by  the  Grower  of  a  written  notice  to  that 
effect  by  the  Elevator  Company. 

This  contract  shall  be  in  effect  from  such  date  to  June  30,  1927,  and  shall  au- 
tomatically extend  and  continue  in  full  force  and  effect  as  to  each  of  the  parties 
hereto  from  year  to  year,  until  the  same  shall  have  been  terminated  by  either 
party  as  to  any  kind  of  grain  in  accordance  with  the  following  terms  and  condi- 
tions. 

(a)  Notice  in  writing  of  said  termination  must  be  given  by  such  party  desiring 
the    termination    to   the   other   party   at   least   forty-five    days,    and    not  more    than 
sixty  days,  prior  to  the  close  of  the  contract  year,  at  the  end  of  which  it  is  sought 
to  terminate  the  contract. 

(b)  The  party  desiring  to  make  such  termination  must,  prior  to   the  effective 
date  of  such  termination,  pay  any  indebtedness  then  due  the  other  party. 

(c)  If   the    foregoing    conditions    are    fully    complied    with,    this    contract    shall 
thereupon  be  terminated  on  the  date  named;  provided,   however,   such  termination 
shall  not  affect  any  uncompleted  sales  or  transactions  or  uncompleted  obligations 


40  U.  S.  Grain  Growers,  Inc. 

on   current   commitments  between  the  parties   hereto;   nor  release   either   from   any 
indebtedness   then   unpaid   or   herafter  accruing"   under   this   contract. 

Section  5.  The  title  to  the  grain  covered  by  this  contract  shall  remain  with 
the  Grower,  unless  otherwise  specified  herein,  until  delivered  at  point  of  storage 
or  shipment  designated  by  the  Elevator  Company;  at  the  time  of  such  delivery 
title  to  the  said  grain  shall  pass  to  the  Elevator  Company  when  paid  for,  except 
when  otherwise  agreed  upon  by  the  parties  hereto,  except  as  to  shipment  by  the 
Grower  on  consignment,  in  which  case  title  shall  remain  with  the  Grower  until 
sold  by  the  U.  S.  Association,  and  unless  some  other  arrangement  shall  be  effected 
by  mutual  agreement  between  the  parties  at  the  time  of  the  transaction,  and  pro- 
vided further  that  the  Elevator  Company  shall  have  the  option  as  agent  for  the 
U.  S.  Association,  to  purchase  the  grain  offered  by  the  Grower  for  consignment, 
the  price  and  terms  of  such  purchase  being  determined  by  mutual  agreement  be- 
tween said  parties. 

Section  6.  Upon  notice  in  writing  to  the  Elevator  Company  by  the  Grower,  the 
contract  between  the  Grower  and  said  Elevator  Company  may  be  transferred  to 
such  other  elevator  company  affiliated  by  contract  with  the  U.  S.  Association,  as 
the  Grower  shall  designate,  upon  such  terms  as  the  U.  S.  Association  shall  approve. 

It  is  further  agreed  that  the  Grower  may,  from  time  to  time,  deliver  his  grain 
covered  by  this  contract  to  another  elevator  company  than  the  one  executing  this 
contract,  provided  the  other  elevator  company  has  executed  a  contract  with  the 
U.  S.  Association  for  the  exclusive  handling  of  growers'  grain  through  that  agency, 
and  provided  the  condition  of  the  roads  or  the  inability  of  the  Elevator  Company 
to  handle  the  grain  because  of  lack  of  storage,  or  transportation  facilities,  renders 
it  necessary. 

Section  7.  This  contract  cannot  be  assigned  to  any  person  except  to  the  pur- 
chaser of,  and  in  connection  with  the  bona  fide  sale  of,  the  land  owned  by  the 
Grower  at  the  time  of  the  execution  of  this  contract,  or  except  as  it  may  be  as- 
signed by  one  tenant  to  another  tenant  succeeding  to  the  former  in  the  operation 
of  the  land  covered  by  this  contract.  In  case  of  such  transfer,  this  document  may 
be  filed  with  the  Elevator  Company,  and  a  new  contract  may  be  executed  in  lieu 
thereof.  Any  other  attempted  assignment  shall  be  of  no  force  or  validity  what- 
soever. 

Section  8.  This  contract  shall  be  terminated  whenever  the  Grower  shall  for 
any  reason  be  expelled  from  membership  in  the  U.  S.  Association;  but  such  ex- 
pulsion shall  not  affect  the  rights  and  liabilities  of  the  parties  hereto  as  to  the 
unmarketed  grain  then  in  the  possession  of  either  party. 

Section  9.  Whenever  the  Grower  delivers  any  grain  to  the  Elevator  Company, 
he  shall  give  the  Elevator  Company  a  signed  statement  showing  what  liens,  if 
any,  there  are  upon  such  grain;  and  the  Elevator  Company  shall  have  the  right  to 
pay  off  all  or  any  part  of  the  said  lien  or  liens  in  order  to  perfect  further  its  title 
to  the  grain,  and  thereupon  the  said  Elevator  Company  shall  make  proper  deduc- 
tions for  the  same  from  the  proceeds  of  the  sale  of  said  grain  belonging  to  the 
Grower.  If  the  amount  of  said  liens  is  excessive  in  the  judgment  of  the  Elevator 
Company,  the  Grower  hereby  agrees  to  pay  off  sufficient  to  reduce  the  same  to  the 
amount  stated  by  the  Elevator  Company  to  be  reasonable,  or  the  Elevator  Com- 
pany may  handle  said  grain  on  the  consignment  basis,  by  and  with  the  consent  of 
the  mortgagee. 

Section  10.  The  Elevator  Company  agrees  to  observe  and  perform  such  rules 
and  regulations  covering  the  inspection,  grading  and  weighing  of  grain  as  may  be 
established  by  the  U.  S.  Association  not  in  conflict  with  state  and  federal  rules, 
regulations  and  statutes. 

Section  11.  From  time  to  time,  upon  the  reasonable  request  of  the  Elevator 
Company,  the  Grower  shall  furnish  such  crop  and  statistical  data  as  requested,  on 
the  forms  provided  for  that  purpose  by  the  Elevator  Company  or  the  U.  S.  Asso- 
ciation. The  Elevator  Company,  upon  the  reasonable  request  of  the  Grower,  shall 
furnish  the  Grower  for  his  ;use  such  information  concerning-  market  conditions  and 
quotations  as  it  shall  have  in  its  possession. 

Section  12.  The  Elevator  Company  shall  pay,  and  the  Grower  shall  accept  as 
payment,  for  any  and  all  of  the  grain  covered  by  this  contract,  a  price  to  be  de- 


Grain    Growers     Contract  41 

termined   by   one   of   the   methods   described    in    Sections    13   and    14,   as   the   Grower 
may  elect.     The  said  right  of  election  applies  to  each  kind  of  grain   separately. 

Section    13.      METHOD  A,    Individual   Sales   Method. 

The  Grower  shall  sell  to  the  Elevator  Company  any  grain  covered  by  this  con- 
tract which  is  not  otherwise  provided  for  by  a  valid  election  of  the  said  Grower, 
in  accordance  with  either  of  the  following  methods.  Method  A-l  or  Method  A-2,  or 
by  any  other  method  mutually  agreed  upon  which  is  in  harmony  with  the  other 
provisions  of  this  contract.  The  Grower  shall  declare  his  choice  of  method  at  the 
time  of  the  delivery  of  the  grain  to,  or  upon  the  order  of,  the  Elevator  Company. 

A-l.     He  may  sell  for  cash  at  a  price  offered   by  the   Elevator  Company. 

It  is  expressly  understood  and  agreed  that  the  Elevator  Company  may  resell 
grain  so  purchased  from  the  Grower  through  the  U.  S.  Association  at  its  own  dis- 
cretion in  respect  to  time,  place  and  quantity,  and  without  regard  to  the  action  of 
other  companies  or  individuals  employing  the  U.  S.  Association  as  a  sales  agent. 

A-2.  The  Grower,  singly  or  jointly  with  other  growers,  may  consign  grain 
through  the  Elevator  Company  for  sale  by  any  method  by  the  U.  S.  Association, 
in  which  case  control  of  time  of  delivery,  shipment  and  sale  shall  remain  with  the 
Grower,  and  the  net  proceeds  of  sale,  less  deductions  for  costs  of  handling,  as 
hereinafter  provided,  shall  be  returned  to  the  Grower.  This  is  without  regard  to 
the  action  of  other  individuals  and  companies  employing  the  U.  S.  Association  or 
Elevator  Company  as  sales  agent. 

The  Elevator  Company  is  hereby  exempted  from  liability  for  losses  in  handling, 
storing,  shipping  and  marketing  grain  committed  to  it  on  the  consignment  basis, 
where  the  negligence  of  the  Elevator  Company  is  not  the  proximate  cause  of  such 
loss  or  damage. 

In  all  shipments  by  the  Individual  Sales  Method,  the  U.  S.  Association  shall  act 
solely  as  sales  agent  for  the  Grower  or  the  Elevator  Company,  and  shall  exercise 
no  power  of  regulation  or  control  over  time  of  sale,  time  of  shipment,  destination, 
quantity  of  grain  to  be  sold,  or  over  the  price  at  which  the  grain  shall  be  sold, 
except  as  the  Grower,  under  Method  A-2,  or  the  Elevator  Company,  under  Method 
A-l,  from  time  to  time  may,  at  their  option,  delegate  to  the  U.  S.  Association  au- 
thority to  determine  such  questions  as  to  individual  transactions. 

Inasmuch  as  the  failure  or  refusal  of  the  Grower  to  deliver  to,  and  market  and 
sell  through,  the  Elevator  Company  the  grain  governed  by  this  contract  will  cause 
detriment  and  injury  to  the  Elevator  Company,  will  impair  its  efficiency  and  the 
obligations  of  contracts  to  which  it  is  a  party,  and  will  increase  its  expense  and 
liability  to  damage,  all  of  which  items  it  is  impracticable  and  extremely  difficult 
to  fix  with  precision;  therefore,  if  the  Grower  shall  fail  or  refuse  to  market  or  to 
sell  through  or  to  the  Elevator  Company  any  grain  covered  by  this  agreement, 
then  the  Grower  agrees  to  pay  to  the  Elevator  Company,  and  the  Elevator  Com- 
pany agrees  to  accept,  the  following  sums  per  bushel:  wheat.  lOc;  rye,  lOc;  flax. 
20c;  and  all  other  grain,  6c;  for  all  grain  covered  by  this  contract  which  is  sold, 
marketed  or  withheld  by  or  for  the  Grower  other  than  in  accordance  with  the 
terms  hereof,  as  liquidated  damages  for  the  breach  of  this  contract;  all  parties 
agreeing  that  this  contract  is  one  of  a  series  dependent  for  its  value  upon  the 
adherence  of  each  and  all  of  the  contracting  parties  to  each  and  all  of  the  said 
contracts.  The  above  agreed  items  are  predicated  upon  average  prices  and  market 
conditions  for  a  period  of  years. 

None  of  the  aforesaid  payments  are  to  be  construed  to  be  a  penalty  or  for- 
feiture but  as  stipulated  liquidated  damages  which  are  hereby  agreed  to  as  rea- 
sonably representing  throughout  the  period  covered  by  this  contract  what  the 
Elevator  Company  and  the  members  thereof  will  suffer  by  reason  of  such  refusal 
or  default. 

This  option,  described  as  Method  A,  whereby  the  Grower  may  sell  individually 
to  the  local  Elevator  Company,  is  severable  and  distinct  from  the  provisions  con- 
tained in  Method  B,  is  dependent  upon  the  consideration  of  the  obligation  of  the 
Elevator  Company  to  furnish  facilities  for  the  efficient  marketing  of  grain  through 
itself  and  affiliated  companies  and  associations,  upon  the  considerations  stated  in 
other  sections  (excepting  therefrom  Sec.  14)  of  this  contract,  and  upon  the  con- 
sideration of  the  obligation  of  the  Grower  to  sell  all  his  grain  covered  by  this 
contract  to  or  through  the  Elevator  Company;  and  the  validity  and  binding  effect 


42  U.  S.  Grain  Growers,  Inc. 

of  the  provisions  contained  in  this  Section  (13)  shall  in  nowise  be  dependent 
upon,  or  related  to,  the  provisions  contained  in  Section  14  of  this  document. 

All  the  provisions  of  this  contract,  save  those  contained  in  Section  14,  shall 
apply  with  full  force  and  effect  to  the  sales  of  grain  governed  by  this  Section 
entitled  "Method  A." 

Section    14.      METHOD   B,    Pooling  Method. 

B-l.  Local  Pool,  (a)  The  Grower  may  agree  to  have  all  of  any  kind  of  grain 
delivered  by  him  to  the  Elevator  Company  comingled  and  mixed  with  grain  of  like 
kind  and  grade  delivered  by  other  growers,  and  the  same  sold  during  such  period 
of  time  as  may  be  agreed  upon  between  the  growers,  provided  storage  and  trans- 
portation facilities  shall  permit,  in  which  case  he  shall  receive,  as  payment,  the 
average  price  secured  for  all  grain  of  like  kind  and  grade  so  co-mingled  and  sold, 
less  deductions  for  costs  of  handling,  as  hereinafter  provided,  and  subject  to  such 
equitable  differentials  as  said  company  may  find  necessary  to  establish.  The  vari- 
ous lots  of  grain  sold  under  this  method  shall  be  known  as  pools.  There  may  be 
established  as  many  pools  of  grain  as  there  are  kinds  and  grades  of  grain  to  be 
handled.  The  pools  shall  include  all  the  commitments  for  any  one  year. 

(b)  The  price  on  the  grain  delivered  by  the  Grower  shall  be  uniform  with  that 
paid  other  growers   regardless  of  any  variations   in   the  price  received   from   such 
sales  for  the  several  products  of  like  kind  and  quality,  subject  to  the  differentials 
applicable,   and  deductions  for  the  cost  of  handling. 

(c)  On   or  before  the  first  day  .of  May  of  each   calendar  year  all   the  growers 
tributary  to  the  Elevator  Company  and  signing  this  or  other  similar  contract  with 
the  Elevator  Company,  who  have  elected  to  participate  in  the  pooling  of  any  kind 
of  grain,  may  choose  from  among  their  number  a  committee  of  three,  to  be  known 

as   the   Local Pooling   Committee    (stating    in    the 

blank  the  kind  of  grain),  hereinafter  designated  the  Local  Pooling  Committee, 
which  committee  shall  exercise  complete  control  over  the  handling,  shipping  and 
selling  of  all  pooled  grain,  determining  the  time,  quantity  and  destination  of  sales, 
and  effecting  all  necessary  contracts  and  other  arrangements  for  storage,  etc.. 
which  may  be  deemed  necessary  for  the  efficient  marketing  of  said  grain;  provided, 
however,  that  these  provisions  do  not  apply  to  "joint  pools,"  Method  B-2,  where 
the  U.  S.  Association  shall  be  in  control.  The  person  designated  by  the  Local  Pool- 
ing Committee  to  have  charge  of  the  handling  of  grain  that  is  pooled  and  the 
proceeds  of  the  sale  of  same,  shall  file  a  bond  with  the  U.  S.  Association  as  trustee 
for  the  growers  joining  in  the  pools  subject  to  their  jurisdiction;  the  said  bonds 
shall  be  in  such  form,  and  amounts,  and  with  such  sureties  as  required  by  the 
U.  S.  Association,  guaranteeing  the  faithful  performance  of  the  duties  of  the  said 
committee  and  the  person  so  designated.  The  U.  S.  Association,  on  request,  shall 
furnish  all  necessary  plans,  contracts,  forms,  etc.,  for  the  proper  handling  of  the 
pools.  The  aforesaid  Local  Pooling  Committee,  at  the  option  of  the  majority  of 
said  committee,  may  delegate  its  powers  to  the  Elevator  Company,  or  other  agency, 
on  conditio'n  that  the  grain  is  marketed  through  the  U.  S.  Association. 

(d)  The  purpose  of  these  provisions   is   to  secure   control   over   the   pooling  of 
any  kind  of  grain   in   the  hands  of  those  who  pool.     If  satisfactory  arrangements 
cannot  be  made  with  the  Elevator  Company  for  handling  the  pooled  grain,  then  the 
said  Local  Pooling  Committee,  or  committees,  handling  one  or  more  kinds  of  grain, 
shall  have   the  privilege  of  contracting  for   the   storing   and   handling   of  the  said 
grain  or  grains  through  any  other  elevator  or  warehousing  company  or  agency  as 
they  may  determine,  without  any  regard  to  any  conflicting  provisions  in  this  con- 
tract; provided  the  other  agency  handling  the  same  shall  have  a  contract  for  the 
exclusive  marketing  of  the  said  grain   through  the  U.  S.  Association. 

In  the  election  of  said  Local  Pooling  Committee  each  of  the  said  growers  shall 
have  one,  and  only  one*,  vote.  The  period  for  which  said  Local  Pooling  Committee 
shall  be  chosen  shall  be  the  period  which  will  include  all  the  pools  of  that  kind  of 
grain  for  that  year,  or  until  their  successors  are  elected  and  qualified.  The  com- 
pensation, if  any,  of  said  Local  Pooling  Committee  shall  be  at  the  option  of  the 
growers  so  pooling  their  grain,  and  shall  be  paid  by  them  pro  rata. 

(e)  The  Local  Pooling  Committee  shall  have  authority  to  determine  when  de- 
liveries of  grain  shall  be  made.     A  Grower  may  express   his  preference  and   the 
Local  Pooling  Committee  will  be  guided  thereby  so  far  as  practicable. 


Grain    Growers     Contract  43 

(f)  The   Local   Pooling   Committee   shall   weigh,    classify   and   grade    the   grain 
delivered  to  the  pools  by  the  Grower;  credit  the  Grower  therewith;  mingle  or  pool 
said  grain  with  grain  of  like  kind  and  grade  delivered  to  the  pools  by  other  grow- 
ers;  and,   at   its   discretion,   clean,   condition,   blend   or  process   the   pooled   grain   to 
increase  its  value  as  food  or  as  an  article  of  commerce. 

(g)  The  Local  Pooling  Committee  shall  furnish  the  Grower  a  "delivery  ticket," 
and    such    other    document   as   may    be    required,    upon    the    delivery    of    his    grain, 
which  shall  show  the  classification,   grade  and  weight  of  the  grain   delivered,   the 
pool  to  which  it  has  been  committed,  and  any  advance  payment  made  upon  it,  and 
other  information  that  may  be  required. 

(h)  The  Local  Pooling  Committee  shall  determine  the  grade  and  quality  of  all 
grain  tendered  in  accordance  with  rules  and  regulations  established  by  the  U.  S. 
Association  for  pooling  purposes.  Regardless  of  what  grade  shall  be  ultimately 
placed  upon  said'grain  at  the  terminal  markets,  the  aforesaid  grading  by  the  Lo- 
cal Pooling  Committee  shall  control  the  proportional  distribution  of  the  net  pro- 
ceeds from  the  sale  of  said  grain  among  the  growers  participating  in  any  pool. 

(i)  The  Local  Pooling  Committee  shall  sell  through  the  U.  S.  Association  the 
grain  so  pooled,  at  such  times,  in  such  quantities,  and  for  such  deliveries,  as  the 
Local  Pooling  Committee  shall  deem  advantageous,  and  at  the  best  prices  obtain- 
able through  the  U.  S.  Association  under  market  and  transportation  conditions,  to- 
gether with  grain  of  like  classification  delivered  to  the  pool  by  other  growers  who 
have  signed  this  or  a  similar  contract,  and  pay  over  the  net  amount  realized 
therefrom  as  payment  in  full  to  the  growers,  according  to  the  value  of  the  grain 
delivered  by  each  of  them,  due  debit  and  credit  being  given  for  all  deductions  for 
cost  of  handling,  differentials  and  adjustments  made  by  the  Local  Pooling  Com- 
mittee. 

(j)  In  order  to  compensate  properly  the  holder  of  delayed  shipments,  reason- 
able carrying  charges  on  different  kinds  and  grades  of  grain  may  be  fixed  from 
time  to  time  by  the  Local  Pooling  Committee,  to  be  credited  to  growers  selling  on 
the  pooling  basis. 

(k)  The  Local  Pooling  Committee  may  transfer  pooled  grain  from  the  local 
elevator  to  terminal  or  other  elevators  for  storage,  or  other  purposes. 

(1)  The  Local  Pooling  Committee  is  authorized  to  exercise,  without  limitation, 
all  the  rights  of  ownership  over  the  grain  covered  by  this  contract;  to  mortgage, 
pledge  or  hypothecate  in  its  name,  on  its  own  account,  all  such  grain,  or  evidences 
of  the  ownership  or  control  of  said  grain,  including  bills  of  lading,  warehouse  re- 
ceipts, etc.  The  Local  Pooling  Committee  shall  distribute  said  funds  pro  rata 
among  the  growers  participating  in  the  pool,  or  it  may  use  part  thereof  for  meet- 
ing expenses  in  the  handling  of  the  pooled  grain. 

(m)  Any  deductions  or  loss  occasioned  by  the  delivery  on  the  part  of  the 
Grower  of  grain  of  inferior  grade  or  condition,  shall  be  charged  against  the 
Grower,  and  deducted  accordingly  from  the  proceeds  going  to  the  said  Grower. 

(n1)  Losses  occurring  in  the  handling,  storing,  shipping  or  marketing  of  pooled 
grain,  not  covered  by  paragraph  (m),  shall  be  charged  against  the  pool  and  not 
against  the  individual  Grower  delivering  the  grain  directly  affected  thereby. 

(o)  'The  Local  Pooling  Committee  shall  make  as  substantial  an  advance  pay- 
ment on  the  grain  committed  to  the  pool  as,  in  its  discretion,  market  and  financial 
conditions  permit,  and  as  soon  as  practicable  after  its  delivery. 

(p)  The  proceeds  from  the  sale  of  grain  shall  be  paid  from  time  to  time,  the 
final  settlement  being  made  within  a  reasonable  time  after  the  proceeds  from  the 
sale  of  all  the  grain  in  the  pool  have  been  received,  and  the  deductions  for  costs 
of  handling  shall  be  determined. 

B-2.  Joint  Pool.  When  a  Local  Pooling  Committee  has  been  created,  as  above 
described,  it  shall  be  authorized  to  elect  whether  the  grain  delivered  under  this 
contract — that  may  be  pooled  with  the  grain  of  other  growers  locally — shall  be 
pooled  jointly  with  grain  of  like  grade  and  variety*  of  the  growers  in  one  or  more 
other  companies.  In  case  the  Local  Pooling  Committee  does  so  elect,  then  the  un- 
dersigned Grower  hereby  agrees  that  all  of  his  grain  so  pooled  shall  automatically . 
become  committed  for  sale  under  the  joint  pooling  method  on  the  terms  and  con- 
ditions above  specified,  and  shall  be  sold  in  accordance  with  the  provisions  cover- 


44  U.  S.  Grain  Grouws,  Inc. 

ing  joint  pools   contained   in   the   contract  between   the   Elevator   Company   and   the 
U.  S.  Association. 

B-3.  Export  Wheat  Pool.  (A  paragraph  is  being-  prepared  covering  a  volun- 
tary pool  of  one-third  or  the  exportable  surplus  of  the  wheat  crop,  to  be  inserted 
at  this  place.) 

Inasmuch  as  the  failure  or  refusal  of  the  Grower  to- deliver  to,  and  market  and 
sell  through,  the  Elevator  Company  will  impair  its  efficiency  and  the  obligation  of 
contracts  to  which  it  is  a  party,  will  increase  its  expense,  and  liability  to  damage, 
will  hinder  the  collection  of  average  prices  on  grain,  to  the  detriment  and  injury 
of  the  other  growers  participating  in -the  said  pool,  all  of  which  items  it  is  im- 
practicablevand  extremely  difficult  to  fix  with  precision;  therefore,  if  the  Grower 
shall  fail  or  refuse  to  market  or  to  sell  through  the  Elevator  Company  any  grain 
covered  by  this  agreement,  then  the  Grower  agrees  to  pay  to  the  Elevator  Com- 
pany, and  the  Elevator  Company  agrees  to  accept,  the  following  sums  per  bushel: 
wheat,  lOc;  rye,  lOc;  flax,  20c;  all  other  grain,  6c;  for  all  grain  covered  by  this  con- 
tract which  is  sold,  marketed  or  withheld  by  or  for  the  Grower,  other  than  in  ac- 
cordance with  the  terms  hereof,  as  liquidated  damages  for  the  breach  of  this  con- 
tract; all  parties  agreeing  that  this  contract  is  one  of  a  series  dependent  for  its 
value  upon  the  adherence  of  each  and  all  of  the  contracting  parties  to  each  and  all 
of  the  said  contracts.  The  above  agreed  items  are  predicated  upon  average  prices 
and  market  conditions  for  a  period  of  years. 

None  of  the  aforesaid  payments  are  to  be  construed  to  be  a  penalty  or  forfeiture 
but  as  stipulated  liquidated  damages  which  are  hereby  agreed  to  as  reasonably 
representing  throughout  the  period  covered  by  this  contract  what  the  Elevator 
Company  and  the  members  thereof  will  suffer  by  reason  of  such  refusal  or  default. 

In  the  event  that  it  shall  be  necessary  to  enforce  by  judicial  proceedings  this 
contract  as  to  grain  pooled  under  Method  B,  the  Elevator  Company  shall  bring  the 
action  for  the  benefit  of  all  growers  who  shall  have  committed  their  grain  for 
handling  under  said  method,  and  any  damages  recovered  thereby  shall  be  the 
property  of  said  growers. 

The  Grower  hereby  elects  to  market  his  grain  covered  by  this  contract  as  indi- 
cated in  Section  23,  in  accordance  with  Method  B,  during  the  period  ending  June 
30,  1927,  or  the  unexpired  portion  thereof.  This  election  shall  continue  from  year 
to  year  after  said  date,  until  revoked  by  written  notice  to  the  Elevator  Company, 
w'hich  shall  be  given  within  sixty  days,  and  not  less  than  forty-five  days,  prior  to 
the  close  of  the  contract  year  when  the  Grower  desires  this  election  to  terminate. 

The  Grower  reserves  the  right  to  make  a  similar  election  in  the  future  on  other 
grains  if  he  so  desires. 

This  contract  to  sell,  described  as  Method  B,  whereby  the  Grower  may  pool  his 
grain  for  sale,  is  severable  and  distinct  from  the  provisions  contained  in  Method  A, 
is  dependent  upon  the  special  consideration  of  the  receipt  of  average  prices  from 
the  sale  of  grain  in  the  pool;  and  the  validity  and  binding  effect  of  the  provisions 
contained  in  this  Section  (14)  shall  in  nowise  be  dependent  upon,  or  related  to,  the 
provisions  contained  in  Section  13  of  this  document. 

All  the  provisions  of  this  contract,  save  those  contained  in  Section  13,  shall 
apply  with  full  force  and  effect  to  the  sales  of  grain  governed  by  this  section, 
entitled  Method  B. 

Section  15.  In  the  event  that  any  one  or  more  of  the  following  methods,  A-l, 
A-2,  B-l,  B-2  or  B-3,  which  may  be  elected  by  the  Grower,  shall  be  lawfully  can- 
celled or  held  to  be  illegal  by  a  court  of  competent  jurisdiction  from  which  no  ap- 
peal can  be,  or  is  taken,  then,  and  in  that  case  the  Grower  shall  have  the  option 
of  electing  one  of  the  other  methods  named. 

Section  16.  The  Elevator  Company,  for  the  sake  of  uniformity  and  in  order  to 
protect  the  Grower  against  the  misuse  of  grain  committed  to  it  for  sale  under  any 
of  the  methods  described  herein,  and  against  the  improper  use  of  funds  owing  the 
Grower  as  the  result  of  any  pools  established  thereunder,  agrees  to  be  governed 
by  and  to  use  such  receipts  and  accounting  forms  as  may  be  prescribed  and  recom- 
mended by  the  U.  S.  Association,  and  that  with  respect  to  such  grain  to  report  to. 
and  accept  accounting  supervision  by,  the  said  U.  S.  Association. 

The  Elevator  Company  hereby  agrees  that  all  persons  responsible  for  the  cus- 
tody of  grain  covered  by  this  contract,  or  handling  money  derived  therefrom,  shall 


Grain    Growers     Contract  45 

be  adequately  bonded,   and   that   failing   to   require  such   bonds,    the   officers   of   the 
Elevator  Company  shall   be  personally   liable  for  any  default. 

Section  17.  Deduction  for  the  Cost  of  Handling.  On  all  grain  governed  by  this 
contract,  the  Elevator  Company  shall  be  authorized  to  deduct  from  the  proceeds  of 
the  sale  of  said  grain  the  following: 

(a)  The  amount  charged  by  the  U.  S.  Association  for  the  handling 
of  said  grain,  in  accordance  with  the  contract  between  the  U.  S.  Asso- 
ciation and  the  Elevator  Company,   attached   hereto;   and 

(b)  Such  reasonable  charges  as  may  be  established  by  the  Elevator 
Company  for  handling,  weighing,  cleaning,  storing  or  performing  such 
other  services   in   connection   with   the   said   grain   as   the   Grower  may 
request,  or  as  may  be  authorized  by  the  terms  of  this  contract. 

Section  18.  It  is  mutually  understood  and  agreed  that  the  services  rendered  by 
the  U.  S.  Association  and  all  subsidiary  companies  are  to  be  rendered  to  the 
Grower  at  cost;  that  the  deductions  for  the  cost  of  handling  made  from  the  pro- 
ceeds of  the  sale  of  grain  are  payments  on  account;  and  that  at  stated  periods  the 
operating  expenses  will  be  determined,  and  any  excess  may  be  returned  pro  rata 
to  th  Grower,  or  invested  in  facilities  for  the  more  efficient  marketing  of  the  grain. 
Annual  reports  of  the  said  receipts  and  expenditures  shall  be  made,  and  copy  of 
same  shall  be  furnished  each  contracting  Elevator  Company.  Deduction  certifi- 
cates, or  other  evidences  of  the  same,  shall  be  distributed  among  the  growers  in 
accordance  with  the  provisions  contained  in  the  contract  between  the  Elevator 
Company  and  the  U.  S.  Association  attached  hereto. 

Section  19.  On  grain  purchased  or  handled  on  the  basis  of  a  price  to  be  deter- 
mined upon  the  net  resale  value  thereof,  less  deductions  for  the  cost  of  handling, 
the  Elevator  Company,  regardless  of  who  holds  title,  shall  be  liable  for  any  loss 
or  damage  in  the  handling  and  storing  of  said  grain,  which  is  due  to  the  negli- 
gence of  the  said  company,  but  not  otherwise. 

It  shall  be  the  duty  of  the  Elevator  Company  to  keep  fully  insured  all  grain 
held  in  storage. 

Section  20.  The  Elevator  Company  authorized  to  contract  under  this  agreement 
must  be  a  farmers'  cooperative  elevator  company  paying  patronage  dividends  and 
organized  under  the  cooperative  laws  of  the  state  where  operating;  or,  where  there 
is  not  such  a  law,  then  in  accordance  with  the  requirements  of  the  U.  S.  Associa- 
tion as  to  the  qualifications  of  a  truly  cooperative  company. 

In  communities  where  there  is  a  stock  company  farmers'  elevator,  the  stock- 
holders or  directors  of  such  elevator  who  are  members  of  the  U.  S.  Association 
may  organize  a  grain  growers  association  to  become  the  local  contracting  body 
ami  supervise  the  handling  and  financing  of  members'  grain.  Where  the  stock- 
holders or  directors  of  such  farmers'  elevator  do  not  organize  such  grain  growers' 
association,  the  U.  S.  Association  shall  make  no  attempt  to  organize  such  com- 
munity prior  to  January  1,  1924. 

Section  21.  The  Grower  shall  be  permitted  to  market  only  that  grain,  under 
the  provisions  of  this  contract,  which  he  himself,  as  land  owner  or  tenant,  has 
raised,  or  to  which  he  is  entitled  from  land  which  he  may  own  and  rent  on  the 
basis  of  a  share  of  the  crops  raised  thereon. 

Section  22.  If  the  standard  form  of  contract  between  the  U.  S.  Association 
and  the  Elevator  Company,  referred  to  herein,  shall  be  changed  as  to  administra- 
tive details  or  methods  of  transacting  business,  said  change  shall  be  deemed  made 
in  the  form  of  said  contract  attached  hereto,  and  this  contract  amended  ac- 
cordingly. 

Section  23.  The  Grower  elects  to  market  in  accordance  with  Method  B,  known 
as  the  "Pooling  Method,"  the  following  grain  covered  by  the  foregoing  contract: 

The  Grower  elects  to  market  in  accordance  with  Method  A,  known  as  the 
"Individual  Sales  Method,"  the  following  grain  governed  by  the  foregoing  contract: 

Section  24.  The  signature  of  the  Grower  to  this  instrument  shall  be  con- 
sidered an  application  for  membership  in  the  U.  S.  Association,  with  which  the 


46  U.  S.  Grain  Growers,  Inc. 

Elevator  Company  is  affiliated.  The  said  Grower  agrees  to  comply  with  all  the 
requirements  as  to  membership,  subscribes  and  agrees  to  the  Certificate  of  Incor- 
poration and  By-laws  of  the  U.  S.  Association,  the  receipt  of  a  copy  of  which  is 
hereby  acknowledged  by  the  Grower;  and  the  Grower  further  authorizes  the  use 
of  any  or  all  of  the  $10,00  membership  fee,  in  hand,  paid  to  the  U.  S.  Association, 
to  be  used  for  organization,  and  other  expenses  incidental  to  the  completion  of 
the  organization  of  the  U.  S.  Association,  the  creation  of  and  ownership  of 
securities  in  subsidiary  and  affiliated  companies  and  other  agencies,  the  securing 
of  memberships,  the  acquisition  of  terminal  warehouse  facilities  and  for  all  other 
purposes  authorized  and  deemed  necessary  by  the  Board  of  Directors  of  the  U.  S. 
Association  for  the  immediate  handling  and  marketing  of  grain  and  for  the 
efficient  organization  of  the  grain  marketing  machinery  contemplated  in  this 
agreement. 

Section  25.  No  party,  his  agent,  or  other  representative,  has  the  right  to  vary 
the  terms  of  this  written  instrument;  and  it  is  expressly  agreed  that  no  oral 
changes  or  modifications  of  the  same  have  been  made. 

In  WitiicHN  Whereof,  the  parties  hereto,  after  a  full  reading  and  consideration 
of  the  terms  hereof,  have  executed  this  contract  on  the  day  and  year  first  above 
written.- 


Post   Office 


(Signature    of    Elevator    Company    or 
Local  Grain   Growers'  Association.) 

Party   of   the    First    Part. 
Witness: 

By    

Witness: , 

(President.) 


(Signature    of    the    Grower.) 
Party   of   the  Second   Part. 


Wheat  acreage  (19'21).. 
Corn  acreage  (1921).... 
Oats  acreage  (1921).... 


The  U.  S.  Grain  Growers,  Inc.,  hereby  acknowledges  receipt  of  the  $10.00 
membership  fee  from  the  above  named  applicant  at  the  place  and  on  the  date  last 
above  written,  and  hereby  admits  the  said  Grower  to  membership.  If,  for  any 
reason,  the  said  U.  S.  Association  is  not  effected,  or  is  not  engaged  in  the  actual 
sale  of  grain  within  two  years  from  the  date  hereof,  then  the  portion  of  the  said 
$10.00  which  is  not  expended  shall  be  returned  to  the  said  Grower  who  executed 
the  foregoing  application  for  membership. 

U.   S.   GRAIN   GROWERS,    INC. 

By 

Agent. 

Witness: ,    1921. 

The   Grower   lives   in Congressional  District, 

State   of 

The  elevator  is  in : ' Congressional  District, 

State   of.... 


Cooperative  Elevator  Contract  47 

Cooperative   Elevator  Contract 

Revised.   Form 

This  Agreement  made  and  entered  into  this day  of „ 

19       ...  between  the  U.  S.   Grain  Growers,   Inc.,  a  non-stock,   non-profit  corporation 

duly  organized  and  existing  under  the   laws  of  the  State  of 

(hereinafter    referred    to    as    the   U.    S.    Association),    party    of    the    first    part,    and 

the ,   a   corporation    (or)    association,    duly    organized    and 

existing   under   the   laws   of (hereinafter   referred   to   as 

the   Elevator  Company),  party  of  the  second  part,  Witnesseth: 

In  consideration  of  the  mutual  obligations  of  the  respective  parties  hereto,  of 
similar  obligations  between  other  elevator  companies  and  the  U.  S.  Association, 
of  the  expenses  incurred  and  to  be  incurred  by  the  Elevator  Company  in  providing 
local  facilities  for  weighing,  grading,  storing,  handling,  processing,  and  shipping 
grain;  of  the  undertaking  on  the  part  of  the  U.  S.  Association  to  provide  competent 
statistical,  financial,  and  other  expert  assistants,  to  establish  crop  and  market 
news  gathering  agencies,  and  to  acquire  the  use  of  marketing  facilities  for  the 
purpose  of  providing  an  efficient  cooperative  marketing  system  for  grain  for  the 
purpose  of  providing  the  producers  with  better  credit  and  storage  facilities  which 
will  tend  to  make  possible  a  more  even  distribution  of  grain  throughout  the 
year,  thereby  tending  to  stabilize  prices;  and  in  order  to  reduce  waste  in  handling, 
to  encourage  a  more  efficient  production,  to  reduce  transportation  costs  by  more 
direct  shipments  from  points  of  origin  to  centers  of  consumption,  to  make  less 
frequent  and  violent  fluctuations  in  prices  due  to  speculation,  and  to  reduce  the 
excessive  costs  occasioned  by  the  present  wasteful,  uneconomic  system  of  market- 
ing the  grain  crops  of  the  United  States: 

NOW   THEREFORE,   said   parties   agree   as   follows: 

Section  1.  The  Elevator  Company  agrees  to  market  through  the  U.  S. 
Association  all  the  grain  committed  to  it  for  sale  or  shipment  by  members  of  the 
U.  S.  Association  (hereinafter  called  the  Growers)  under  the  terms  of  a  contract 
between  the  said  growers  and  the  Elevator  Company  (hereinafter  referred  to  as 
the  Growers'  Contracts). 

Section  2.  The  U.  S.  Association  agrees  to  endeavor  to  sell  said  grain 
directly,  or  otherwise,  to  millers,  manufacturers,  exporters,  or  others  within  or 
without  the  United  States  at  the  best  prices  obtainable  by  it  under  market  condi- 
tions, in  accordance  with  the  terms  of  this  contract. 

Section  3.  Any  grain  from  growers  covered  by  this  contract  that  is  in 
possession  of  the  Elevator  Company  and  unsold  upon  the  effective  date  hereof 
may  be  committed  for  sale  under  this  contract. 

Section  4.  The  U.  S.  Association  shall  make  rules  and  regulations  for 
standardizing  the  manner  of  keeping  warehouse  records  and  accounts  and  for 
making  reports  required  by  the  U.  S.  Association;  and  the  Elevator  Company  shall 
observe  and  obey  all  such  rules  and  regulations  and  shall  permit  the  examination 
or  auditing  of  said  records,  accounts,  and  reports  by  the  U.  S.  Association. 

Section  5.  The  Elevator  Company  agrees  to  make  reasonable  requests  of 
growers  for  such  crop  and  statistical  data  as  the  U.  S.  Association  may  desire,  and 
to  transmit  the  same  promptly  to  the  said  U.  S.  Association,  using  such  forms  for 
that  purpose  as  may  be  provided  by  the  said  U.  S.  Association;  and  the  U.  S. 
Association,  upon  reasonable  request  therefor,  shall  furnish  the  Elevator  Company 
for  the  use  of  the  Grower,  market  news  and  other  information  in  its  possession 
concerning  thje  values  and  market  conditions  of  grains  and  related  products  in 
this  and  other  countries. 

Section  6.     The  U.  S.  Association  may  make  rules  and  regulations  and  provide 

jr        inspectors  and  weighers  to  standardize  the  methods  of  weighing,  handling,  storing, 

and  shipping  of  grain,  subject  to  this  contract;  and  the  Elevator  Company  agrees 

to    observe    and    perform    any    such    reasonable    rules    and    regulations    as    may    be 


48  U.  S.  Grain  Growers,  Inc. 

prescribed    by   the   U.   S.   Association    not   in   conflict   with   state   and    federal   rules, 
regulations  and  statutes. 

Section  7.  The  Elevator  Company  shall  report  to  the  U.  S.  Association  any 
lien  or  liens  upon  the  grain  covered  by  this  contract,  and  the  U.  S.  Association 
may,  within  its  discretion,  pay  off  all  or  any  part  of  such  lien  or  liens  and  deduct 
such  payments  and  any  costs  connected  therewith  from  the  proceeds  of  the  sale 
of  such  grain.  The  Elevator  Company  shall  warrant  the  title  to  all  grain  com- 
mitted to  the  U.  S.  Association  for  sale,  except  as  to  any  incumbrances  reported  to 
the  Elevator  Company  in  writing  prior  to  the  time  of  shipment. 

Section  8.  Upon  that  grain  which  is  committed  to  the  Elevator  Company  to 
be  sold  on  the  basis  of  a  price  to  be  determined  from  the  net  resale  value  thereof, 
less  deductions  for  the  cost  of  handling,  the  U.  S.  Association,  within  its  discretion, 
may  make  advance  payments  as  market  and  financial  conditions  warrant;  pro- 
vided, the  Elevator  Company  shall  fully  protect  the  U.  S.  Association  against 
losses  thereby. 

Section  9.  It  is  understood  and  agreed  that  the  U.  S.  Association  may  represent 
interests  that  under  ordinary  commercial  conditions  might  be  considered  hostile. 

Section  10.  It  is  expressly  agreed  and  understood  that  all  debts  of  the  U.  S. 
Association  shall  be  incurred  in  its  own  name  and  without  responsibility  therefor 
on  the  part  of  the  Elevator  Company,  except  when  specific  authority  or  approval 
of  the  same  in  writing  shall  have  been  given  by  the  Elevator  Company. 

Section  11.  The  U.  S.  Association  is  exempted  from  liability  for  losses  incurred 
in  marketing  and  selling  grain  covered  by  this  contract  that  are  not  due  to  its 
own  negligence. 

The  Elevator  Company  shall  be  responsible  for  and  charged  with  allowances, 
deductions  or  losses  made  or  sustained  by  the  U.  S.  Association  arising  from  the 
negligence  of  the  Elevator  Company. 

Section  12.  Joint  Poola.  In  consideration  of  the  mutual  obligations  of  the 
parties  hereto,  that  the  Elevator  Company  shall  furnish  the  necessary  facilities 
for  local  handling  and  shall  sell  exclusively  through  the  U.  S.  Association  the 
grain  received  from  members  of  the  U.  S.  Association,  and  that  the  U.  S.  Associa- 
tion shall  undertake  to  supervise  the  joint  pooling  of  grain  as  defined  in  the 
Growers'  Contracts,  and  shall  undertake  to  provide  the  facilities  which  may  be 
reasonably  necessary  for  the  same,  it  is  hereby  agreed  between  said  parties  as 
follows: 

(a)  The  Local  Pooling  Committee,  as  defined  in  the  Growers'  Contracts,   shall 
receive,   weigh,   process,   warehouse,   and   ship  all  grain   committed   to   a   joint  pool 
by   members   of   the   U.   S.   Association,    subject   to   orders   of  the   U.   S.   Association 
which  shall  be  observed  and  performed   insofar  as   the  facilities   available  to  the^ 
Local  Pooling  Committee  reasonably  permit.     The  U.   S.   Association   shall   classify 
all  pooled  grain  by  variety,  quality,  grade,  or  any  other  commercial  standard  and 
mingle  or  pool  said   grain  with  grain   of  like  classification  committed  to   the  pool 
by  other  Local  Pooling  Committees  participating  therein. 

(b)  The    U.    S.    Association    may    order    the    transfer    of    said    grain    to    any 
elevator  and  direct  the  manner  in  which  it  is  handled  therein. 

(c)  The  U.   S.   Association   shall   undertake   to   sell   said   grain,   together   with 
grain  of  like  classification  and  grade  committed  to  the  pool  by  other  Local  Pooling 
Committees,  at  its  own  discretion  in  respect  to  time,  conditi  >ns  and  terms,  at  the 
best    prices    obtainable    by   it   under   market    conditions,    collect    the    proceeds,    and 
shall  pay  over  the  net  amount  received  therefrom,  as  payment  in  full,  to  the  Local 
Pooling  Committees  participating  in  the  pool,  according  to  the  value  of  the  grain 
contributed  by  each  of  them,  after  making  deductions  for  the  cost  of  handling  and 
such  other  charges  against  said  grain  as  are  authorized  by  this  contract,  and  also 
making  such  credits  as  may  be  due. 

(d)  The    Growers    under    contract    with    the    Elevator    Company    under    the 
Growers'   Contracts,  participating   in  a  joint  pool,   agree  that  their  grain   shall   be 
so    mingled    and    that    the    net    returns    therefrom,    less    all    costs,    advances    and 
charges,   shall   be   credited  and  paid   to   them   on   a   proportional   basis,   considering 
all  differentials  and  adjustments,  out  of  the  receipts  from  the  sale  of  all  grain  of 
like  classification. 


Cooperative  Elevator  Contract  49 

(e)  The  pool  shall  be  for  a  crop  year,  and  payment  shall  be  made  from  time 
to  time,   as   rapidly  as   practicable,   within   the  discretion   of   the   U.   S.   Association, 
in  due  proportion  until  the  accounts  of  the  pool  are  fully  settled. 

(f)  The  U.  S.  Association  may  borrow  money  in  its  name  on  the  grain  through 
drafts,    acceptances,    notes    or    otherwise,    on    any    warehouse    receipt    or    bill    of 
lading,   upon  any  accounts   for   the  sale  of  the  grain  or  on   any  commercial  paper 
delivered  therefor. 

(g)  Losses  due  to  failure  of  customers   or  banks  and  losses   occurring   in  the 
handling,  storing,  shipping  or  marketing  of  pooled  grain  shall  be  charged  against 
the    pool    and    not    against    the    individual    Grower    or    Local    Pooling    Committee 
delivering  the  grain  directly  affected  thereby,  provided  the  said  loss  is  not  due  to 
the  negligence  of  the  said  individual  or  Local  Pooling  Committee. 

The  foregoing  agreement  as  to  the  handling  of  joint  pools  is  severable  arH 
distinct  from  the  balance  of  this  contract;  and  the  terms  and  conditions  stated 
elsewhere  in  this  agreement  do  not  depend  upon  any  of  the  provisions  contained 
in  this  section. 

Section  13.  Deductions  for  the  coat  of  handling.  The  proceeds  from  all  sales 
of  grain  made  by  the  U.  S.  Association  shall  be  paid  by  the  purchasers  thereof  to 
the  said  U.  S.  Association,  which  proceeds  shall  be  blended  into  one  general  fund; 
and  the  U.  S.  Association  shall  deduct  from  said  proceeds  such  uniform  amounts 
or  percentages  as  shall  be  deemed  necessary  from  time  to  time  by  the  duly 
constituted  officers  or  representatives  of  the  U.  S.  Association,  in  order  to  meet  all 
expenses  properly  chargeable  to  the  handling  of  such  grain;  and  also  certain  other 
deductions  shall  be  made  in  order  to  provide  special  funds  for  carrying  out  the 
purposes  of  the  U.  S.  Association.  The  deductions  stated  in  the  preceding  sentence 
shall  be  described  in  this  and  all  related  contracts  as:  deductions  for  the  cost  of 
handling.  The  net  proceeds  from  said  sales  above  advances  which  have  been  made 
by  a  properly  constituted  authority  shall  be  paid  to  those  entitled  to  the  same,  In 
accordance  with  the  usual  customs  of  the  trade  in  handling  such  transactions. 

The  special  funds  mentioned  in  the  preceding  paragraph  shall  include  those 
deemed  necessary  by  the  Board  of  Directors  of  the  U.  S.  Association  for  the 
acquisition,  by  purchase,  lease  or  otherwise,  of  the  control  over  property  to  be 
used  by  the  said  association;  the  retirement  of  obligations  incurred  in  the  purchase 
of  such  property  or  in  the  operation  of  the  business  of  the  said  association;  the 
creation  of  reserves  for  such*  retirements,  for  renewals;  and  for  any  other  expendi- 
tures which  the  said  U.  S.  Association,  its  officers  or  agents,  are  authorized  to 
incur. 

So  far  as  practicable  all  capital  expenditures  and  interest  charges  on  invest- 
ments in  marketing  facilities  shall  be  incurred  by  self-sustaining  subsidiary,  or 
affiliated  organizations,  and  appropriate  charges  shall  be  levied  against  the  grain 
using  the  facilities  furnished  by  such  organizations.  All  operating  and  capital 
expenditures,  which  are  lawfully  incurred  in  accordance  with  the  powers  and 
duties  of  the  IT.  S.  Association,  shall  be  prorated  fairly  and  justly  in  accordance 
with  the  judgment  of  the  officers  of  the  U.  S.  Association  against  the  grain 
necessitating  such  expenditures;  provided,  however,  that  if  the  grain  is  sold  on  a 
grain  exchange,  and  no  other  service  of  a  substantial  character  is  rendered  by 
the  U.  S.  Association,  the  total  expenditures  which  shall  be  considered  chargeable 
against  said  grain  shall  in  no  case  exceed  one  per  cent  of  its  value,  unless  the 
standard  charge  for  similar  service  shall  be  more  than  one  per  cent,  in  which  case 
said  total  charges  by  the  U.  S.  Association  shall  not  exceed  such  standard  charge. 
On  other  grain  where  facilities  requiring  capital  investment  are  used,  the  maximum 
deductions  for  any  one  year  from  the  proceeds  of  all  sales  of  grain  to  be  made  for 
capital  expenditures,  interest  charges,  etc.  (aside  from  ordinary  operating,  includ- 
ing overhead  expenses)  in  order  to  acquire  the  ownership  or  control  over  market- 
ing facilities  shall  in  no  case  exceed  one  per  cent  of  the  value  of  the  grain  so 
handled  by  the  U.  S.  Association.  The  distinction,  in  accounting,  between  capital 
and  operating  income  and  expenditures,  shall  be  in  accordance,  so  far  as  prac- 
ticable, with  the  rules  adopted  for  common  carriers  by  the  Interstate  Commerce 
Commission. 

The  amount  of  deductions  for  the  cost  of  handling,  as  above  specified,  shall 
be  estimated  by  the  Board  of  Directors  of  the  U.  S.  Association,  and  shall  be  so 
established  as  to  yield  as  nearly  as  may  be  a  sum  of  money  equivalent  to  the 


50  U.  S.  Grain  Growers,  Inc. 

operating  and  capital  expenditures  and  reserves,  and  such  other  expenses  as  may 
be  reasonably  estimated  as  essential  to  be  incurred  by  the  U.  S.  Association,  and 
its  subsidiary  organizations,  for  the  ensuing  year.  In  case  a  sum  in  excess  of 
such  requirement  shall  be  collected  during  any  fiscal  year,  it  shall  be  set  aside, 
or  invested  to  meet  the  obligations  or  needs  of  the  future,  for  the  use  and  benefit 
of  the  Growers;  unless  the  same  shall  be  relatively  large  and  substantial,  in 
which  case  the  U.  S.  Association  may  distribute  all,  or  a  part  of  the  same,  to  its 
members  in  proportion  to  the  grain  sold  through  the  U.  S.  Association,  at  such 
time  as  it  shall  determine.  And  the  Elevator  Company,  for  valuable  consideration, 
receipt  of  which  is  hereby  acknowledged,  waives  all  right,  title  and  interest  in 
and  to  any  portion  of  such  funds. 

It  is  understood  and  agreed  that  this  contract  and  the  contract  between  the 
Grower  and  the  Elevator  Company  provide  fully  and  adequately  for  the  equitable 
distribution  of  earnings  made  by  the  U.  S.  Association  or  its  subsidiary  organiza- 
tions, and  that  any  charges  and  deductions  hereunder  revert  back  to  the  benefit 
of  the  Grower  through  his  membership  in  the  U.  S.  Association. 

The  U.  S.  Association  shall  issue  certificates  to  the  Elevator  Company  indicat- 
ing the  proportionate  amounts  of  the  deductions  for  capital  expenditures  and  of 
the  excess  from  other  deductions  attributable  to  grain  received  therefrom;  and 
the  Elevator  Company  shall  issue  proportionate  certificates  based  thereon  to  the 
member  of  the  U.  S.  Association.  Such  certificates  shall  indicate  a  prorata  interest 
in  such  deductions,  distributable  only  in  the  form,  at  a  time  and  in  the  manner 
determined  by  the  U.  S.  Association.  The  said  certificates  shall  be  assignable 
freely  by  endorsement;  but  shall  not  be  deemed  as  obligations  of  the  U.  S. 
Association  with  definite  or  other  maturity,  and  shall  not  bear  interest;  and  they 
shall  not  represent  any  obligations  or  rights,  other  than  a  proportionate  ownership 
in  certain  assets  held  by  the  U.  S.  Association,  which  shall  not  be  separable  or 
subject  to  distribution  during  the  life  of  the  U.  S.  Association,  except  at  the  option 
of  the  duly  constituted  Board  of  Directors  of  the  U.  S.  Association. 

Section  14.  Term  of  Contract.  This  contract  shall  be  in  force  from  its  execu- 
tion to  June  30,  1927,  and  thereafter  shall  continue  in  full  force  and  effect  as  to 
each  of  the  parties  hereto  from  year  to  year,  until  the  same  shall  have  been 
terminated  by  either  party  in  accordance  with  the  following  terms  and  conditions: 

(a)  Notice    in    writing    of    said    termination    must    be    given    by    such    party 
desiring  the  same,   to   the  other  party  at  least  forty-five    (45)    days,   and   not  more 
than  sixty   (60)   days,  prior  to  the  close  of  the  contract  year,  at  the  end  of  which 
it   is  sought  to   terminate   the   contract. 

(b)  The  party  desiring  to  make  such  termination  must,  prior  to  the  effective 
date  of  the  same,  pay  any  indebtedness  then  due   the  other  party. 

(c)  If   the   foregoing   conditions   are   fully   complied   with,    this   contract    shall 
thereupon   be   terminated  on   the   date   named.      Provided,    however,    that  this   shall 
not  affect  any  uncompleted  sales   or  transactions   between   the   parties   hereto,   nor 
release  either  from  any  indebtedness  then  unpaid  or  hereafter  accruing  under  this 
contract,  nor  relieve  the  Elevator  Company  from  its  obligation  to  sell  to  or  through 
the  U.  S.  Association,  nor  the  U.  S.  Association  from  its  obligation   to  market  and 
sell,   as   the  age,nt  of  the  Elevator  Company,   all   of  the  grain   committed   to   it   or 
purchased  by  it  from  members  of  the  U.  S.  Association  that  was  grown  during  the 
preceding   season   or   seasons   subsequent   to   the   execution    of  this    contract. 

Section  15.  On  all  grain  which  has  been  delivered  to  and  is  under  the  control 
of  the  Elevator  Company,  and  covered  by  this  contract  which  the  Elevator  Com- 
pany fails  to  market  through  the  U.  S.  Association  in  accordance  with  the  terms 
and  conditions  herein  stated,  the  Elevator  Company  agrees  to  pay  to  the  U.  S. 
Association  and  said  U.  S.  Association  agrees  to  accept  the  following  sums  per 
bushel  as  liquidated  damages:  wheat,  5c;  rye,  5c;  flax,  lOc;  for  all  other  grains,  3c. 

Section  16.  It  is  mutually  understood  and  agreed  that  the  U.  S.  Association 
has  a  special  interest  in  the  enforcements  of  contracts  between  its  members  and 


Cooperative  Elevator  Contract  51 

the  Elevator  Company  and  may  bring  action  thereon  in  its  own  name,  in  the  name 
of  the  Elevator  Company,  or  in  the  name  of  the  Grower,  as  the  occasion  may 
justify. 

In    Witness   Whereof,    the   parties   to    this    agreement    have    hereunto    set   their 
hands  and  seals,  the  day  and  year  first  above  written. 

U.  S.  GRAIN  GROWERS,  INC. 

By    President, 

Party  of  the  first  part. 


Party  of  the   second   part. 
Postoffice    address: 


52  U.  S.  Grain  Growers,  Inc. 


Index  to  Contracts  and  By~Laws 


(First  Numeral  of  Each  Series  Refers  to  Page,  Second  Numeral  to  Article, 
Section  or  Clause,  i.  e.  40-16  Refers  to  Page  40,  Section  16) 


Accounting   by   local    elevator   company 44 — 16 

Accounts   and   records  of   elevator   company 47 — 4 

Action   for   enforcement   by    elevator   company 44 — 14 

Adjourned  meeting's,    conventions 33 — 10 

Admission    to    membership 45 — 24 

Advance  payments   48 — 8 

Advances,    local    pools 43 — 0 

Advisory  sub-committees    37 — 7 

Agreement  to  reduce  liens 40 — 9 

Alterations   in    elevator   company   contract 45 — 22 

Alternates 32—2 

Amendments  to  by-laws 38 

Annual  reports   to   elevator  companies 45 — 18 

Application    for   membership 45 — 24 

Appointment;    removal,    employes  and    agents 35 

Assignment   of   certificates   of   deductions 36 — 2 

Assignment    of    contract : 40 — 7 

Assistance   by   U.    S.    Association 36 — 2 

Auditing    and    examination,    elevator    company    records 47—4 

Audit  report    36 — 3 

B 

Board    of    directors 33 — 1 

Bonds  for  local    pooling    committee 42 — c 

Bonds  for  officers  and  employes 35 — V 

Bonds,  persons    handling   grain 44 — 16 

Borrowing  money  on  grain,  joint  pool 49 — f 

Borrowing   money,    requirements 34 — 3 

Branch   sales   offices 36 — a 

Breach  of  contract,   membership 31 — 6 

C 

Cancellation  by  legal  process , 44 — 15 

Carrying  charges .  .43 — j 

Certificate    of   membership 31 — 3 

Certificates    of   deductions 36—2,  49—13 

Certificate,    true    copy 46 

Changes   in   contract - 4 6 — 25 

Charges  against  grain,   limitation   to   1   per  cent 49 — 13 

Charges  by    elevator   company 45 — 17 

Charges  by   U.   S.   Association 45 — 17 

Charges  against  member,  conviction 31 — 6 

Chicago    office 35— VII 

Classes    of   directors 33 — 1 

Compensation   and   expenses  of  officers ^ 34 

Conduct   of    business * 38 — 1 

Conduct  of  conventions 32 — 2 

Congressional    district   conventions 32 — 2 

Consideration,  elevator  contract 47 


f 


Index  to  Contracts  and  By  Laws  53 

• 

Consideration,    joint    pool 48 — 12 

Consideration,    grower    contract 39 

Contracts 37 — 4 

Control  of  land,   grower  contract .- 39 — 3 

Control  over  local   pool 42 — c 

Convention,    national 32 — 3 

Cooperative    elevator    companies 37 — 4 

Cooperative   organization,    definition •>. 45 — 20 

Credentials    for    delegates 33 — 8 


D 

Dates  and  places  of  congressional  district  conventions 32 — 4 

Dates  of  meetings   of  directors -. 34 — 2 

Debts  of  U.  S.  Association 48 — 10 

Deduction     certificates     36 — 2,   49 — 13 

Deductions  due   to   quality,    local   pooling 43 — m 

Deductions   for   cost   of    handling 45 — 17,   49 — 13 

Deductions 36 — 2 

Definition    of    pool 42 — Bl 

Delegates  to  congressional  district  conventions 32 — 2 

Delegates  to   national  convention 32 — 3,  33 — 7 

Delegation   of  power   to   elevator   company 42 — c 

Deliveries,    grower's   contract 42 — c 

Delivery    tickets 43 — g 

Delivery   to    other    elevator 42 — 6 

Departments  of  company 35 — VI 

Depositories    of   company 35 — VIII 

Designation    of    officers 34-— 1 

Directors,    board   of 33 — III 

Distribution  of  proceeds,  joint  pool 48 — c 

Distribution  of  receipts  from  pooling 43 — 1 

Districting    for    directorships 34 

Duties  and  compensation  of  employes  and  agents 35 — V 

Duties  of  local   pooling  committee 43 — j  to  p 

Duty   of   local   pooling   committee,   joint   pools 48 — a 

Duties  of  secretaries  of  conventions   and  voting  units 33 — 8 

Duty  of  U.  S.  Association,  joint  pools 48— c 


E 

Election    by    grower 45 — 23 

Election    by    local    pooling    committee 43 — B2 

Election    for    pooling 44 

Election  of  delegates   in   congressional  districts 32 — 2 

Election    of    directors 32 — 3,  33^-1 

Elevator    company   contracts 37 — 4 

Eevator    company,    qualifications 45 — 20 

Elevator   company   to   furnish    information 40 — 11 

Employes   and   agents 35 — V 

Enf orcemerit    of    contracts 50 — 16 

Executive  committee,   appointment 34 — 3 

Executive   committee,   powers 34 — 3 

Exemption    from    execution 31 — 5 

Exemption   from   liability 41 — A2 

Expenses   of   officers  and   directors 34 — 3,  1 

Exportable    surplus     44 — B3 

Exporting   subsidiary    36 — IX 

Export   pool    44 — B3 

Expulsion    from    membership 40—8 


54  U.  S.  Grain  Growers,  Inc. 


Facilities  for  financing-.  .  .  . 36 — c,  d 

Farmers'   elevator   stock    companies 37 — (2) 

Fees,    membership     ". 31—2 

Final   payment,   local   pool 43 — p 

Finance    department 35 — VI 

Financial    methods     35 — VIII 

Financing   subsidiary    36 — IX 

Fiscal    year     36 — 4 

G 

Government,    representative    form   of 32 

Grading-    and    inspection 37 — 5 

Grading    by    local    pooling    committee 43 — f 

Grain    covered,    grower    contract 39 — 1,   45 — 23 

Grain    in    possession 39 — 1,   47 — 3 

Grower's  contract,   referred  to   in   elevator  contract 50 

Grower's  contract,   referred   to   in   by-laws .- 36 —  X,l 

Grower   to   furnish   crop    data 40 — 11 


I 

Indebtedness  upon   termination,   grower's   contract 39— b 

Individual    sales   method 41 — 13 

Information   department    35 — VI 

Initiation    fee,    distribution 46 

Initiation  fees,  authority  to  expend 36 — 3 

Inspection  and   weighing   by   elevators 47 — 6 

Inspection,  grading   and    weighing 40 — 10 

Insurance  by  elevator  company 45 — 19 

Interest   on   corporate   funds 35 — VIII 

Investment    in    facilities .  .  45 — 18 


•  J 

Joint   meetings   of  vo£ing   units 32 — 1 

Joint     pool 43— B2 


L, 

Legal    department     35 — VI 

Liability  of  elevator  company   for  negligence 44 — 16 

Liens    48—7,   40—9 

Limitation    to    grower's    contract 45 — -21 

Liquidated  damages    41— A2,   44,   50—15 

Local    pool 42— Bl 

Loeal    pooling    committee 42 — c 

Losses   in    pooled   grain •  43 — n 

Losses   to   be  charged   against  joint   pool 49 — g 


Meetings,   notices,   directors'   meetings 34 — 2 

Meetings   of  directors 34—2 

Membership   in  U.  S.   Association 31 — 1 

Membership  in  U.  S.  Association,    application    for 4,5 — 24 

Methods  of  selling 41 — 13 

Mingling,    agreement    for,   joint    pool 48 — a 


Index  to  Contracts  and  By  Laws  55 


N 

Neglig'ence,    elevator    company,    liable    for 48 — 11 

Negligence,   U.   S.   Association,   liable   for .  .48 — 11 

Notice  and  waiver  of  notice : 37 — 2 

Notice,    general    37 — 1 

Notice    of    termination 50 — a 

Notice  of  termination,   grower  contract 39 — a 


0 

Oath    for    directors : 33 — 1 

Obligation  of  elevator  company    (elevator  contract) 47 

Obligation    of   elevator   company    (grower   contract) 39 — 1 

Obligation    of   grower 39 

Obligation   of  U.   S.    Association 47 

Officers     34—1 

Offices      35— VII 

"One   man,    one    vote" 32 — 4 

Operating    costs    ^ 49 — 13 

Operations     , 36 — X 

Order  of  business 38 — 1 

Organization     department     35 — VI 

P 

Partial    wheat    pool 44 — B3 

Parties   to   grower    contract ' 38 

Parties    to    elevator    contract 47 

Paymen-t   for   grain,    joint   pool 48 — c 

Payment,    grower's    contract 43 — i 

Plans,   contracts   and   forms 42 — c 

Pooling    department    .  . 35 — VI 

Pooling   method     42 — 14 

Powers  of  board   of  directors 34 — 3 

Powers   of   local    pooling   committee 42 — e,   43 — f 

President     34 — 2  , 

Presumption   of   notice 37 — 1 

Price    determination " 40 — 12 

Price    to    growers,    uniform 42 — b 

Purposes   of   elevator    contract J...47 


Qualifications    for    membership 31 — 1 

Qualifications    of    officers 34 — IV 

Quorum    in    conventions   and    voting    units 33 — 6 


R 

Reasons  for  grower's   contract 39 

Receipt  of  membership   fee 46 

Report  to  national   convention 36 — 3 

.Representative    government     32 

Retirement  from  farm  business 31 — 6 

Returns    to    grower 45 — 1 8 

Right   to   pay    liens 40 — 9 

Rules    of    order 38 — 2 

Rules,    U.    S.    Association    to    make 47 — 6 


U.  S.  Grain  Growers,  Inc. 


s 

Salaries  and  expenses,  deleg-atos 33 9 

Salaries   of   board 3 4 — 3 

Sales   of   pools 43 \ 

Sales  agency  of  U.   S.    Association 41 — j 

Sales  and  collections     37 — 6 

Sales  department      35 — v 

Sales  for    cash 41 — A|J 

Sales  on    consignment    41 — A| 

Seal,     corporate 34 — 3 

Secretary    3 4 — 4 

Service   departments 36- 

Services    at    cost 45- — 1! 

Severability    of    options 41 — A; 

Severable  as  to  method,  joint   pool 44 — ] 

Special    funds 49 — 13| 

Statistical    department     35 — VI,   36 — e 

Statistics      40 — 111 

Stock   companies,    reorgan ization 45 — 20| 

Storing   grain 42 — c,    43 — k,    45 — 19,    48 — a 

Subsidiary    corporations 36 — i: 

\ 

T 

Term   grower   contract 39 — 4 

Terminal    elevators    36 — b 

Termination    elevator    contract 50—1' 

Termination   grower    contract .  .  .  . : 39 — 4 

Termination    of    membership 31 — 6 

Term   of   delegates 33 — 7 

Term  of  pool,    local -. 42 — Bj 

Term  of  pool,     joint 4  9 — e 

Time  and  place  of  meetings   and   conventions 32 — 4 

Time  of   national   convention 32 — 4 

Title,  elevator   company,    to   warrant 48 — 7 

Title   to   grain 40—5 

Transfer  of  contract     40 — 6 

Transfer  of  grain,   joint   pools 48 — b 

Transfer  of  grain    to   other   elevators 43 — k 

Transfer  to  different   voting   unit 32 — 1 

Transportation   department    35 — Vj 

Treasurer     35 — 5 

U 

Uncompleted    sales 50 — c 

Use   of    funds    deducted 49 — 1! 

Use  of  special  funds 49 — 1! 

V 

Vacancies     in     board 34 — 3 

Vice    Presidents     34 — 3 

Voting,    manner    of 33 — 5 

Voting  power 31 — 4 

Voting    unit   meetings 32—2 

W 

Warehousing   subsidiary    36 — 1 

Working    capital     .  .  : .  .36—3 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 
BERKELEY 

Return  to  desk  from  which  borrowed. 
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LD  21-95w-ll,'50(2877sl6)476 


